RBI Unveils Immediate Trade Relief Measures to Mitigate Global Headwinds and Debt Burden
SDG 8: Decent Work and Economic Growth | SDG 9: Industry, Innovation, and Infrastructure
Institutions: Reserve Bank of India (RBI) | Ministry of Finance
Trade Relief Measures 2025
The Reserve Bank of India (RBI) has issued the Reserve Bank of India (Trade Relief Measures) Directions, 2025, which came into force immediately on November 14, 2025. The central rationale for this immediate intervention is to mitigate the “burden of debt servicing brought about by trade disruptions caused by global headwinds” and to “ensure the continuity of viable businesses”.
The directions apply to Commercial Banks, NBFCs, All-India Financial Institutions, and Co-operative Banks. Eligible borrowers must be engaged in exports in specified sectors (including textiles, apparel, chemicals, and machinery) and have had their accounts classified as ‘Standard’ as of August 31, 2025.
Key relief measures include:
Moratorium/Deferment: Financial institutions (REs) may grant a moratorium on term loan principal/interest payments due between September 1, 2025, and December 31, 2025, with interest accruing on a simple interest basis. This accrued interest can be converted into a Funded Interest Term Loan (FITL) repayable by September 30, 2026.
Export Credit Extension: The tenor of pre-shipment and post-shipment export credit disbursed till March 31, 2026, can be extended by up to 450 days.
Asset Classification: Crucially, the moratorium will not affect the asset classification of the loan or be treated as restructuring. However, REs must make a general provision of at least 5% for eligible ‘Standard’ accounts.
The RBI’s immediate Trade Relief Measures are vital because they are a proactive macro-financial intervention designed to shield India’s credit system from global volatility.
Shielding Viable Businesses: By permitting a moratorium on debt and extending credit tenor up to 450 days for ‘Standard’ accounts, the policy prevents external shocks (global trade disruption) from forcing otherwise healthy exporters into immediate bankruptcy.
Preventing Systemic Contagion: The RBI’s crucial provision that these concessions will not affect the loan’s asset classification (NPA status) ensures that stress in the export sector does not lead to a sudden, destabilizing spike in Non-Performing Assets across Commercial Banks and NBFCs, thereby preserving the stability and resilience of the entire financial sector.
Balancing Facilitation and Safety: The measure is a precise policy instrument: it grants flexibility for exporters while requiring banks to maintain a mandatory 5% general provision against these accounts. This creates a prudential buffer to absorb risk, balancing trade facilitation with the financial safety of the banking system.
FEMA Amendments 2025
The FEMA Amendments also introduced on November 14, 2025 (to the Foreign Exchange Management (Export of Goods and Services) Regulations, 2015) address the regulatory compliance side that governs an exporter’s legal obligation to repatriate funds:
Export Realization Deadline: Under FEMA, exporters are legally required to realize and repatriate foreign exchange proceeds within a stipulated period (historically nine months).
The Amendment’s Role: By replacing “nine months” with “fifteen months” and “three years” with “five years” in relevant clauses, the RBI provides the necessary legal “breathing room” in foreign exchange regulations.
The two updates are mutually reinforcing:
The Trade Relief Measures Directions give the exporter credit relief (the bank won’t classify the loan as NPA).
The FEMA Amendments give the exporter regulatory relief (the RBI/Enforcement Directorate won’t penalize the exporter for the resulting delay in realizing and repatriating the foreign currency).
What do the RBI’s “Trade Relief Measures” typically entail for debt servicing? → These types of relief measures, issued under the RBI’s broad regulatory and banking powers, are designed to address temporary liquidity issues caused by unexpected macro events (like global trade disruption) rather than fundamental business viability. The measures typically allow financial institutions to grant relief to businesses—including Micro, Small, and Medium Enterprises (MSMEs) involved in trade—through mechanisms like debt restructuring, extension of repayment periods, or temporary moratoriums without classifying the accounts as Non-Performing Assets (NPAs), thereby preserving credit access and bank balance sheet health.
Follow the full news here: Reserve Bank of India (Trade Relief Measures) Directions, 2025 Foreign Exchange Management (Export of Goods and Services) (Second Amendment)