RBI’s Circular No. RBI/2025-26/96: Trade Relief Measures for Exporters. Immediate Moratorium & Credit Support to Boost India’s Export Sector
On 14 November 2025, the Reserve Bank of India (RBI) issued Circular No. RBI/2025-26/96 titled “Trade Relief Measures” to support Indian exporters facing payment delays and global-trade disruptions.
The relief package is aimed at sectors notified by RBI, providing a suite of measures including moratoriums, extended credit terms, working-capital relaxations, and asset-classification safeguards. This article examines the relief in detail, decodes eligibility and operational implications for exporters, and outlines key considerations for industry stakeholders.
Global economic headwinds, supply-chain disruptions and mounting international trade tensions have weighed heavily on Indian export firms. According to Reuters, RBI’s move follows escalating U.S. tariffs impacting sectors like garments, jewellery, leather and chemicals.
In response, RBI intervened to ease credit burdens, extend export-finance timelines and prevent asset-downgrades for banks servicing exporters.
What the Circular Covers – Relief Details:
Here are the major components of the relief and how they apply to exporters:
1. Moratorium (September–December 2025)
Exporters in eligible notified sectors may postpone:
EMI (equated monthly instalments) on term loans falling due between 1 Sept and 31 Dec 2025.
Interest on cash‐credit (CC) / overdraft (OD) accounts maturing in this period.
The moratorium allows for repayment deferral, giving breathing-space in this uncertain trade environment.
2. Simple-Interest Only Treatment:
Deferred interest under the moratorium will accrue on a simple interest basis (i.e., no compounding).
The deferred interest may be converted into a facility of “funded interest term loan” (FITL), payable by 30 Sept 2026.
This ensures that exporters are not penalised via compound interest during the stress period.
3. Working Capital Support – Margin & Drawing-Power Relaxation
Temporary lowering of margin requirements (for working-capital facilities) for eligible exporters.
Revised (enhanced) drawing‐power in working-capital accounts to improve liquidity.
These measures improve short-term cash-flow flexibility for exporters encountering delays in realisation of export proceeds.
4. Extended Export Credit Periods:
For pre-shipment and post-shipment export-credit facilities sanctioned up to 31 March 2026, the maximum permissible export-credit term has been extended up to 450 days.
This gives exporters longer tenure to fulfil exports and realise proceeds, thereby reducing rollover stress.
5. Packing-Credit Flexibility:
Packing‐credit facilities sanctioned before August 2025 may now be settled either using fresh export‐proceeds or domestic‐sale proceeds (in case the export does not materialise).
This flexibility assists exporters who may divert goods to domestic market owing to global demand disruptions or logistic constraints.
6. No Asset Downgrade / Non-restructuring for Availing Relief:
Importantly, availing the above relief (moratorium or changed drawing‐power) will not be treated as restructuring of the account.
The existing asset classification of the borrower’s credit facility with the bank remains unchanged.
This removes the fear of automatic asset‐classification downgrade, which often leads to higher provisioning and lender reluctance.
Eligibility & Coverage of the Relief scheme:
The relief is directed at exporters in notified sectors that are facing payment delays or global-trade disruptions.
Banks and NBFCs (non-banking financial companies) are permitted to offer such relief to eligible export‐oriented borrowers.
Pre-shipment / post-shipment credit facilities disbursed till 31 March 2026 qualify for the extended term (450 days) benefit.
Packing credit flexibility applies to facilities sanctioned before August 2025.
Banks need to ensure the relief is implemented in accordance with the directions of the RBI circular.
Implications for Exporters:
Cash-flow relief: The moratorium and working‐capital enhancements provide immediate breathing-space to exporters who may be grappling with delayed payments or disrupted orders.
Cost relief: With interest on simple basis (no compounding), the cost of credit relief is reduced compared to an unresolved stress scenario.
Enhanced competitiveness: The extension of export‐credit period to up to 450 days enables exporters to negotiate longer contract durations or face longer shipment/realisation timelines.
Credit-asset safety: By ensuring that availing the relief does not lead to asset‐classification downgrade, exporters can more confidently approach their lenders without fear of triggering restructuring norms.
Operational flexibility: Packing-credit settlement flexibility means exporters can pivot to domestic sales (if needed) and still stay in compliance with the facility terms, reducing forced liquidations.
Key Considerations & Action Points for Exporters:
Dialogue with lenders: Exporters should proactively engage with their banks/NBFCs to invoke the moratorium, revise margins or drawing power, and extend credit term under the circular.
Documentation: Ensure full compliance with the circular’s eligibility criteria; maintain clear records of the eligibility status, sanction dates, and covered facilities.
Cash-flow planning: Use the moratorium interval (Sept–Dec 2025) to prepare for the eventual repayment or conversion of deferred interest (FITL) by 30 Sept 2026.
Contract review: Re‐evaluate export contracts in the light of elongated timelines (450 days) and ensure terms with buyers reflect realistic shipment & realisation schedules.
Stay updated: Monitor further guidance from RBI or banks regarding which sectors are “notified”, and how banks interpret or implement the circular in practice.
Risk mitigation: While the relief is substantial, exporters should not become complacent—continue to monitor global trade disruptions, buyer payment risks and currency/forex volatility.
Communication with stakeholders: Exporters can highlight to stakeholders (e.g., buyers, suppliers, financiers) that they are benefiting from RBI’s relief, thereby potentially improving supplier/buyer confidence in delivery and payment commitments.
Why This Matters for India’s Export Ecosystem:
The export sector is critical for India’s economic growth, foreign-exchange earnings and employment generation. By issuing this circular (RBI/2025-26/96), RBI is sending a strong signal of support to exporters at a time of global trade stress. The coordinated relief helps:
Strengthen the resilience of Indian exporters facing external shocks.
Ensure banks remain willing to finance export-oriented firms, avoiding a credit freeze.
Maintain India’s standing in global markets by helping exporters meet contract obligations and manage liquidity.
Prevent a domino effect of defaults in export finance and preserve the banking sector’s asset‐quality in the export segment.
Conclusion
The RBI’s Trade Relief Measures (Circular No. RBI/2025-26/96) mark a timely and targeted policy intervention for Indian exporters. By combining moratorium relief, working capital adjustments, extended credit terms and non-downgrade assurances, the regulator has offered a multi-layered cushion to export firms navigating payment delays and disrupted trade flows. Exporters, banks and ancillary stakeholders must now operationalise the relief, effectively, align contracts and cash-flows with the new timelines, and ensure the sector not only weathers the current storm but remains competitive for the future.
For exporters in the notified sectors, this is a significant opportunity — but also a responsibility: to use the moratorium wisely, plan for repayments, and leverage the extended credit timelines to realign export operations for the changing global trade order.
Team: Credit Money Finance