RBI’s 2025 Trade Relief: What It Means for Exporters and Lenders

Introduction

Global trade has been under pressure through most of 2025. Freight rates moved sharply, demand weakened in Europe and East Asia, and shipment cycles stretched. The pressure increased in August 2025 when the United States imposed a cumulative 50% tariff on Indian goods. Since the US is India’s largest export market, this created an immediate shock for several MSME-dominated sectors.

These disruptions pushed many exporters into tight working capital positions. Lenders began to see early stress in textiles, plastics, chemicals, jewellery and engineering goods. On November 14, 2025, the Reserve Bank of India issued the Trade Relief Measures Directions, 2025 to prevent temporary disruptions from becoming long term credit problems.

The Context: What the RBI Aims to Solve

Indian exporters faced a major shock in August 2025, when a cumulative 50% tariff on Indian goods entering the United States came into effect. The US is India’s largest export market, accounting for about $87 billion dollars a year, or roughly 20% of total exports. The effect was immediate. In September 2025, exports to the US fell 11.9% YoY.

Labour-intensive sectors felt the impact the most. Textiles, which employ more than 45 million people, saw a sharp slowdown in orders. The gems and jewellery sector reported turnover declines of up to 50% in some parts of the market. Exporters in other key sectors also saw buyers delay or reduced shipments.

These tariff effects came on top of other pressures:

• Freight costs on important routes moved up and down due to vessel shortages and supply chain shifts

• Partner markets faced periodic congestion, which slowed deliveries

• Many buyers sought delayed shipments or extended payment terms

• Key categories such as apparel, footwear, plastics and chemicals saw uneven demand in Europe

India’s merchandise exports had already been flat in the first half of 2025. The US tariff shock made conditions more difficult. Working capital cycles lengthened, receivable days increased and MSMEs faced tight liquidity.

The RBI aims to prevent short term pressure from becoming long term damage. The objectives of the Directions include:

• Supporting viable exporters facing temporary disruptions

• Reducing the risk of sudden deterioration in lender portfolios

• Allowing repayment adjustments without triggering restructuring norms

• Helping maintain production and employment in export clusters

The preamble to the Directions reflects these objectives. It highlights the need to support the credit system during global uncertainty. A similar set of relief steps was used during the Covid period, when the RBI offered moratoriums and deferments to prevent temporary shocks from creating wider credit stress.

Key Components of Relief Measures

The summary of the directions is below:

Relevant Details

1. Eligibility Criteria

Borrowers must operate in these sectors - textiles, plastics, chemicals, machinery, electrical equipment, auto parts and jewellery.

They must also have an export credit facility outstanding as of 31 August 2025. Their account must have been standard on that date. If multiple lenders are involved, any lender that did not sanction export credit may rely on certification from the lender that did.

2. Moratorium and Deferment

Lenders may grant a moratorium on installments of term loans during the period from 1 September to 31 December 2025. For cash credit or overdraft facilities, they may defer recovery of interest during this window. Interest will accrue only on a simple basis.

Accrued interest can be converted into a funded interest term loan (FITL). Borrowers may repay this FITL between April and September 2026.

3. Drawing Power Adjustments

Lenders may adjust margins and recalculate drawing power to support working capital needs. After the relief period, drawing power must return to normal assessment rules.

4. Export Credit Tenor Extension

Export credit, both pre shipment and post shipment, may be extended up to 450 days for facilities disbursed until 31 March 2026.

5. Flexibility for Packing Credit

For packing credit taken on or before 31 August 2025, lenders may allow liquidation through domestic sales or a different export order.

6. Asset Classification and Provisioning

The moratorium period will not count as days past due. Relief measures will not be treated as restructuring. Lenders must create a general provision of at least 5% for eligible accounts that were standard on 31 August 2025 and are now in default. 

Impact on Exporters and Lenders

Exporters (MSMEs)

• Relief from repayment pressure during a period of lower demand

• Better liquidity through moratorium, interest deferment and drawing power adjustments

• More time to complete delayed or shifted export orders

• Flexibility to liquidate packing credit through domestic sales

• Credit cycles aligned with longer receivables

Lending Institutions

• Lower risk of slippages in export linked accounts

• No restructuring related classification issues

• Time to reassess borrower viability during global uncertainty

• Stronger balance sheets through required provisions

• Better recovery prospects once conditions stabilise

The Measures support both continuity of business and stability in the credit system.

Strategic Implications for Lenders

The Directions bring new operational demands but also open valuable opportunities.

Operational and Implementation Complexity

Lenders must:

1. Identify eligible accounts across 20 HS code sectors

2. Verify export credit outstanding and standard status

3. Apply moratoriums and interest deferments across different loan types

4. Compute simple interest and set up FITLs

5. Adjust and restore drawing power

6. Update asset classification systems

7. Create the 5% general provision

8. Prepare MIS for DAKSH and update CICs

These steps need flexibility, accuracy and speed. Manual work raises the chance of errors. The Measures highlight the need for technology that can adjust schedules, compute revised interest, tag eligible accounts and generate compliant reports. Adaptable systems are essential to convert policy changes into daily operations.

Opportunities Beyond Compliance

Lenders can also use this moment to:

• Build trust with MSMEs through smooth implementation

• Gain insight into receivable cycles and sector risk

• Strengthen monitoring and early warning processes

• Design more flexible working capital products for exporters

• Improve long term credit governance through better data and workflows

The Directions offer lenders a chance to improve resilience, support clients more effectively as well as add more strategic value to the business.

How OneFin Can Support Lenders

OneFin’s low-code, configurable lending stack is perfectly suited to support policy-linked changes with accuracy and speed. Lenders can:

• Configure moratoriums, deferments and FITLs without code changes

• Apply simple interest rules and revised schedules easily

• Adjust drawing power based on defined parameters

• Maintain accurate data for asset classification and provisioning

• Generate MIS for regulatory submissions

• Monitor export-linked portfolios through dashboards and alerts

As a trusted partner, OneFin helps lenders focus on credit decisions as its platform handles operational details and compliance requirements.

Conclusion

The RBI Trade Relief Measures 2025 are timely and targeted. They help exporters manage sudden and significant disruptions and give lenders a structured way to protect asset quality. The Directions also show the value of strong digital systems that can adjust to policy shifts and support accurate implementation.

Lenders that act early and build technology readiness will be better prepared for future volatility. OneFin helps institutions convert regulatory instructions into smooth, compliant operations while building long term resilience in lending.

To know more about OneFin, schedule a Demo.