RBI Announces Relief Measures for Exporters Amid US Tariff Impact

Mumbai, October 1 – The RBI has rolled out a series of measures aimed at addressing the challenges faced by Indian exporters following the US government’s decision to impose a 50% tariff on Indian imports. The RBI governor emphasized that the Indian export sector is crucial for the long-term growth of the economy, and it is essential to enhance trade competitiveness and simplify compliance for exporters and importers.

Key Measures Announced

Extension of Repatriation Period

One of the major changes is the extension of the repatriation timeline for funds held in foreign currency accounts of Indian exporters within International Financial Services Centres (IFSC). The period has been increased from one month to three months. According to the RBI, this relaxation is expected to encourage more exporters to open IFSC accounts and enhance foreign exchange liquidity in the domestic financial ecosystem.

Forex Outlay for Merchandise Trade

The regulator has also extended the maximum forex outlay period for Merchandise Trade Transactions (MTT) from four months to six months. This move aims to provide merchants with additional flexibility in completing their international trade transactions while maintaining profitability.

Simplified Compliance for Small Traders

To ease operational challenges, especially for small-value exporters and importers, the RBI has simplified the reconciliation process under the Export Data Processing and Monitoring System (EDPMS) and Import Data Processing and Monitoring System (IDPMS). Under the revised rules, bills up to Rs 10 lakh can now be reconciled and closed based on a self-declaration by the trader, significantly reducing paperwork and compliance costs.

Broader Regulatory Rationalisation

The governor further announced that the central bank will rationalise FEMA regulations that govern most parts of international trade. There will be proper streamlining of provisions under the ECB (External Commercial Borrowing) regulations, which include those related to eligible borrowers, recognised lenders, borrowing limits, cost of borrowing, and reporting requirements.

Impact on the Export Sector

The measures were highly anticipated, as the Indian export sector has been facing demand-related issues following the US government’s additional tariffs. These changes will help ease liquidity constraints, simplify compliance, and provide exporters with more operational flexibility to find new growth markets.

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