Home / Business and Economy / Exporters Urge RBI: Extend Credit Period Amid Global Woes
Exporters Urge RBI: Extend Credit Period Amid Global Woes
7 Oct
Summary
- FIEO requests RBI to extend export credit period to 450 days.
- Higher borrowing costs could burden MSME exporters significantly.
- Global trade uncertainty includes geopolitical tensions and supply chain disruptions.
The Federation of Indian Export Organisations (FIEO) has requested the Reserve Bank of India (RBI) to extend the period for pre-shipment and post-shipment export credit from 270 days to 450 days. This plea follows the RBI's recent decision to increase the policy repo rate by 25 basis points to 5.50%, adopting a stance of calibrated tightening. FIEO expressed concern that elevated borrowing costs could place a significant financial strain on exporters, particularly those in the medium and small enterprises (MSMEs) sector.
FIEO President S C Ralhan acknowledged the RBI's move as a measure to combat inflationary pressures and maintain price stability. However, he emphasized the critical need for monetary policy not to impede the availability of working capital for export-oriented businesses. Ralhan highlighted the exceptionally uncertain global environment faced by exporters, citing geopolitical tensions, volatile energy prices, supply-chain disruptions, and payment delays as factors extending the export working-capital cycle.
Ralhan pointed out that despite challenges, the Indian economy has shown resilience, with GDP growth at 7.8% in the first quarter of 2026-27. He urged the RBI for greater flexibility in export finance, suggesting the extension of credit periods to accommodate longer shipping times, logistics issues, and delayed payment realizations. This extension, he believes, would provide exporters with much-needed breathing room to manage their international commitments without undue financial stress. Recent trade pacts and reduced US tariffs are also improving India's export competitiveness.
