RBI announces measures to help exporters amid high US tariffs
Oct 1, 2025
Synopsis
The Reserve Bank of India announced steps to support exporters. This action addresses challenges from US tariffs. The RBI extended the repatriation period for foreign currency accounts. It also increased the forex outlay period for trade transactions. Compliance for small exporters and importers saw simplification. These measures aim to improve business operations.
The Reserve Bank of India's rate-setting committee on Wednesday announced several measures to aid exporters' business to help overcome challenges posed by the imposition of 50% by the Trump administration on Indian shipments.
The host of measures includes reduced paperwork and compliance burden for small exporters and importers.
"The export sector is a vital part of India's economy," RBI Governor Sanjay Malhotra said while announcing steps to further strengthen the sector and enhance ease of doing business for traders.
One of the key measures announced by the central banks is the extension of the time period for repatriation from foreign currency accounts of Indian exporters in IFSC to three months, from the earlier one-month period.
As a foreign policy reform, RBI had permitted Indian exporters to open foreign currency accounts with a bank outside India for the realisation of export proceeds. Funds deposited in these accounts can be used for making import payments or have to be repatriated by the end of next month from the date of receipt of the funds.
"It has now been decided to extend the time period for repatriation, from one month to three months, in case of such foreign currency accounts maintained in IFSC in India," RBI chief said, adding this will encourage Indian exporters to open accounts with IFSC Banking Units and also increase forex liquidity in IFSC.
Under the latest policy measures, the central bank also increased the period for forex outlay for Merchandise Trade transactions from four months to six months. This move is expected to help Indian merchants overcome the challenges they face in completing their business transactions efficiently while maintaining profitability.
"In terms of extant guidelines on MTT, outlay of foreign exchange is allowed up to four months. It has now been decided to increase the period for the forex outlay from four months to six months, in case of MTT," it said.
The RBI has decided to simplify the process of reconciliation in the Export Data Processing and Monitoring System (EDPMS) and Import Data Processing and Monitoring System (IDPMS). This would ease compliance for exporters/importers, especially of small-value goods and services.
Under the revised guidelines, reconciliation of bills and closure can be attained by a bank in EDPMS or IDPMS on the basis of a declaration by the concerned exporter or importer that the amount has been realised in EDPMS/IDPMS of a value equivalent to Rs 10 lakh per bill, or less.
"The revised procedure will also enable a reduction in the realisable value of bills by AD banks based on such a declaration. This measure is expected to reduce compliance burden on small value exporters and importers and enhance ease of doing business," RBI said.
RBI Governor Malhotra also announced plans to rationalise FEMA regulations regarding non-residents establishing their business presence in India.
RBI also proposed regulations of key provisions relating to eligible borrowers, recognised lenders, limits on borrowing, cost of borrowing, end-use and reporting, in the External Commercial Borrowing, issued under FEMA.
The amendments to regulations will be notified shortly.
[The Economic Times]
