RBI’s Immediate Trade Relief Measures 2025: Easing Debt Burden for Export-Linked Sectors amid Global Headwinds

The Reserve Bank of India (Trade Relief Measures) Directions, 2025[1] (“RBI Directions”) was issued last November to cushion exporters from the trade disruptions caused by global headwinds and to ensure the continuity of viable businesses.

This RBI Direction applies to Non-Banking Financial Companies (“NBFCs”) including Housing Finance Companies (“HFCs”), Commercial Banks, Primary (Urban) Co-operative Banks, State Co-operative Banks and Central Co-operative Banks (collectively referred as “REs”). The major compliances under the Directions are-

1. Framing a Policy:

A policy has to be formulated by the REs for providing relief measures to borrowers in specific sectors (detailed below), including the objective criteria for considering the reliefs, which they are obligated to disclose in the public domain.

2. Developing MIS:

REs are also required to develop a management information system (“MIS”) on the reliefs provided to its borrowers, including, inter alia, borrower-wise and credit-facility-wise information regarding the nature and amount of relief granted.

3. Reporting Requirements:

In addition to the above, the REs are mandated to submit a fortnightly report (as on 15th and at the end of each month), in a format to be hosted by RBI on its DAKSH platform.

Eligibility Criteria for borrowers

On the other hand, the borrowers have to meet all of the following eligibility criteria in order to be provided with the relief measures under these Directions-

1. The borrower is engaged in exports relating to any of the sectors mentioned in the Directions, which, inter alia, cover sectors like organic chemicals, articles of iron and steel, footwear, aluminium articles, nuclear reactors, boilers, machinery and mechanical appliances; parts thereof, electrical machinery and equipment, furniture, bedding mattress among others.

2. The borrower had an outstanding export credit facility from a RE as of August 31, 2025.

3. The account(s) of the borrower with all REs was/were classified as ‘Standard’ as on August 31, 2025.

Relief Measures

A. Moratorium:

• REs have been given the power to grant a moratorium on payment of all instalments (principal and/or interest) falling due between September 1, 2025 and December 31, 2025 for all term loans.

• With respect to working capital, REs may defer the recovery of interest applied to all such facilities during the effective period.

• During the moratorium/ deferment period, interest will continue to accrue. However, interest application will be on simple interest basis, without compounding effect, i.e., there will be no interest on interest.

• The accumulated accrued interest during moratorium/ deferment period may be converted into a funded interest term loan which shall be repayable in one or more instalments after March 31, 2026, but not later than September 30, 2026.

• With respect to working capital facilities, a RE may, at its discretion, recalculate ‘drawing power’ by reducing the margins and/or reassessing the working capital limits, during the effective period. Any such review, after the expiry of the effective period shall be based on regular assessments.

B. Extension of tenor for Export Credit:

• A RE eligible to undertake export financing business may permit an enhanced credit period of up to 450 days for pre-shipment and post-shipment export credit disbursed till March 31, 2026.

• With respect to packing credit facilities already availed by exporters on or before August 31, 2025, where dispatch of goods could not take place, a RE may allow liquidation of such facilities from any legitimate alternate sources, including domestic sale proceeds of such goods or substitution of contract with proceeds of another export order.

C. Asset Classification and Provisioning:

• The moratorium period/ deferment, wherever granted, has to be excluded by the RE while calculating the number of days past-due for the purpose of asset classification under the extant IRACP [Please insert full form] norms applicable to the RE.
• Grant of moratorium/ deferment of instalments and recalculation of the ‘drawing power’ in accordance with these Directions will not be treated as an event of restructuring. Consequently, such a measure, by itself, shall not result in asset classification downgrade.
• With respect to eligible borrower accounts which were in default but were classified as ‘standard’ as on August 31, 2025, and where relief measures have been extended pursuant to these Directions, a RE shall make a general provision of not less than 5 per cent of the total outstanding in such accounts, by December 31, 2025.
• The above general provision may be adjusted against the actual specific provisioning requirements for slippages from these borrower accounts. Any residual general provisions at the end of the financial year 2025-26 shall be either written back or adjusted against the provisions required for all other borrower accounts by June 30, 2026.

Conclusion

From the perspective of Regulated Entities, the RBI (Trade Relief Measures) Directions, 2025 provide a structured framework to extend time-bound relief to eligible exporters during a period of global trade uncertainty, without triggering asset classification downgrades. While the Directions offer operational flexibility through moratoriums, extended export credit tenors, and regulatory forbearance, they are accompanied by clearly defined policy formulation, disclosure, reporting and provisioning requirements.

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[1] https://rbidocs.rbi.org.in/rdocs/notification/PDFs/96NT64128BCA543F4D898521AAB983AE8F1E.PDF

Authored by: Bitasta Ganguly

Co-authored by: Amiya Mukherjee

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