- The Federation of Indian Export Organisations requested RBI to extend export credit to 450 days from 270 days
- RBI raised the policy repo rate by 25 basis points to 5.50% amid inflation concerns and price stability needs
- FIEO highlighted higher borrowing costs could strain MSME exporters amid global trade uncertainties
The Federation Of Indian Export Organisations (FIEO) asked the Reserve Bank of India (RBI) to extend the period of pre-shipment and post-shipment export credit to be extended to 450 days from 270 days.
This is development comes after the RBI's decision to raise the policy repo rate by 25 basis points to 5.50% and change its monetary policy stance to calibrated tightening.
ALSO READ: India's August Trade Deficit Narrows To $26.86 Billion As Exports Surge 26%
However, the Federation cautioned that higher borrowing costs could increase the financial burden on exporters, particularly those in medium and small enterprises (MSMEs), at a time when global trade is facing heightened uncertainty.
FIEO President S C Ralhan said that the RBI's decision to raise the repo rate by 25 basis points is understandable against the backdrop of rising inflationary pressures and the need to maintain price stability. He also stated that it is key that monetary policy does not constrain the availability of working capital for export-oriented businesses, especially MSMEs.
“Exporters are currently operating in an exceptionally uncertain global environment. Geopolitical tensions, volatile energy prices, supply-chain disruptions, longer transit times and delays in payments are extending the export working-capital cycle," Ralhan said.
He said that the Indian economy has shown "considerable resilience", with Gross Domestic Product (GDP) growth at 7.8% in the first quarter of 2026-27 and merchandise as well as services exports maintaining strong momentum.
The FIEO President said that higher interest costs in such circumstances can adversely affect the competitiveness of Indian exporters, especially those operating on thin margins.
Ralhan urged the RBI to provide greater flexibility in export finance by extending the period of pre-shipment and post-shipment export credit from the existing 270 days to 450 days because of longer shipping and transit periods, logistics disruptions and delayed realisation of export proceeds. He stated that such an extension would provide much-needed breathing space to exporters and enable them to honour their international commitments without facing undue financial stress.
This development comes after US tariffs on Indian goods fell from a peak of 50% to around 10%-18%, reducing a major cost disadvantage for exporters. The India-UK trade pact also removes an earlier apparel duty disadvantage, while the India-EU FTA improves access to a market estimated at around 200 billion euros. Together, these developments made India more attractive to global brands looking to diversify sourcing away from China.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.