Relief for Exporters: FEMA Rules & Repayment Timelines Eased

The Reserve Bank of India is taking several possible measures to mitigate the impact of trade disruptions on exports arising due to the global headwinds. The move is estimated to provide short-term relief to export-oriented businesses facing delayed shipments, poor demand, and tighter cash flows.

In the press release, the RBI said that it has extended the timelines under the Foreign Exchange Management Act (FEMA) for the realisation and repatriation of export proceeds.

Now, exporters will have 15 months, which was earlier 9 months, for realising, and bringing back the full value of goods, software, or services exported from India.

Moreover, the time limit for shipping goods after receiving advance payments has been increased from 1 year to 3 years, giving exporters more flexibility in managing delayed orders and supply constraints.

In addition to FEMA relaxations, the central bank has notified some new norms under the Reserve Bank of India (Trade Relief Measures) Directions 2025. These include a moratorium on term-loan repayments and interest recovery on working-capital loans falling due between September 1 and December 31, 2025. Lenders have also been permitted to reassess their drawing power for working-capital limits by reducing margins when recalculating limits, helping firms manage temporary liquidity gaps.

Also, the RBI has streamlined the rules for export credit repayment. The maximum credit period for both pre-shipment and post-shipment export credit has been extended from one year to 450 days for loans disbursed till March 31, 2026. Exporters who had availed packing credit on or before August 31, 2025, but couldn’t dispatch goods, will be allowed to repay these facilities using alternate legitimate sources, including proceeds from domestic sales or another export order.

Abhishek Jain, Indirect Tax Head & Partner, KPMG, said, “the RBI’s measures give exporters timely breathing space at a moment when cash cycles are tightening due to tariffs and delayed realisations.”

He further added, “Extending repayment timelines and easing credit terms will directly help companies manage working capital without disrupting production plans. It’s a practical intervention that stabilises sentiment in the near term, and the next thing industry is now watching closely is the tariff rationalisation announcement- because that will ultimately decide cost competitiveness and planning the future.”