BIG RELIEF: RBI Extends Export Payment Time to 15 Months! Government Adds ₹45,000 Cr Support!

Author

Satyam Jha | Whalesbook News Team

Detailed Coverage:

The Reserve Bank of India (RBI) has permitted exporters to receive proceeds from their shipments within a 15-month period, a significant extension from the previous 9-month limit. This decision aims to support exporters facing financial strain, largely attributed to a substantial 50% tariff imposed by the United States on Indian goods, which took effect on August 27. The amendments to the Foreign Exchange Management (Export of Goods & Services) Regulations, as announced by RBI regional director Rohit P Das, will be effective from their publication in the Official Gazette. Notably, the RBI had previously extended this deadline to 15 months during the COVID-19 pandemic in 2020.

In parallel, the government has approved two key schemes with a combined outlay exceeding ₹45,000 crore: the Export Promotion Mission (₹25,060 crore) and the Credit Guarantee Scheme (₹20,000 crore). Prime Minister Narendra Modi stated that these initiatives will enhance export competitiveness, particularly benefiting MSMEs and labour-intensive sectors.

Impact: This dual approach of regulatory easing and financial support is poised to provide considerable relief to Indian exporters. The extended realization period offers better cash flow management, while the government schemes aim to foster growth and competitiveness. This is expected to positively influence India's trade balance and overall economic sentiment. Rating: 8/10

Difficult Terms: * **Realise proceeds**: To obtain payment for goods or services that have been exported. * **Repatriate**: To bring money earned in a foreign country back to one's home country. * **Tariff**: A tax imposed by a government on imported or exported goods. * **Foreign Exchange Management (Export of Goods & Services) Regulations**: Rules established by the RBI governing export transactions and the management of foreign currency in India. * **Gazette notification**: An official public record of government decisions, laws, or regulations published in the government's official gazette. * **MSMEs**: Micro, Small, and Medium Enterprises, classified by their investment size and annual turnover.