Faced with some of the highest US tariffs in the world, Indian exporters are set to knock on the door of the Reserve Bank of India seeking relief. Industry persons are set to meet with Governor Sanjay Malhotra on Thursday, Sept. 11, seeking easier loan repayment norms and waiver of penal interest, sources told NDTV Profit on Sunday.
The exporters have pushed for a 12-month moratorium on credit repayment and demand a relaxed NPA classification on export loans up to 180 days, sources said. They also want a sovereign guarantee scheme to aid entry into new markets.
The Trump administration has imposed a 25% punitive tariff on India for purchasing Russian oil, on top of a 25% base rate. The 50% tariff is one of the highest in Asia, making Indian goods uncompetitive compared with manufacturing rivals like Vietnam, South Korea and Bangladesh.
The US is India's biggest export market, and the tariffs are expected to hurt labor-intensive businesses like textiles, footwear, and gems and jewelry the most.
Sanjay Malhotra has indicated the central bank's readiness to take appropriate measures to support the economy. "Whatever is required to support economic growth, including those of sectors that are impacted more, we will not be found wanting in our job," the RBI Governor told an annual banking conference last month.
The RBI has lowered India's GDP forecast by 20 basis points in April after the 'Liberation Day' tariff announcements. The central bank has also eased monetary policy by slashing the repo rate by 100 bps and pumping liquidity into the system.
Last week, Bloomberg News reported Indian exporters have lobbied the central bank to allow them to temporarily convert proceeds from their US business at a rupee rate that's 15% lower than current levels, to help cushion the blow from Trump's punitive tariffs.
Exporters are seeking a rupee exchange rate of around 103 per dollar for US earnings, Pankaj Chadha, chairman of the Engineering Export Promotion Council of India, said in a phone interview to Bloomberg News. The rupee has weakened past 88 to the dollar.
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