Exporters to Meet RBI Governor on Sep 11: Seeking Loan Relief and Market Expansion Support
Indian exporters are scheduled to meet Reserve Bank of India (RBI) Governor Sanjay Malhotra on September 11, 2025, to discuss urgent measures aimed at mitigating the financial strain caused by recent US tariffs. The delegation, led by the Federation of Indian Export Organisations (FIEO), is advocating for a range of support mechanisms to ensure the sector's competitiveness and sustainability.
Key Demands from Exporters
Loan Repayment Moratorium
Exporters are requesting a 12-month moratorium on both principal and interest payments for eligible export credit. This measure aims to alleviate immediate financial pressures and provide breathing room for businesses to stabilize operations.
Sovereign-Backed Credit Guarantees
To facilitate entry into new markets, exporters propose the introduction of a sovereign-guarantee window offering up to ₹25 crore per exporter. This initiative seeks to eliminate the need for collateral, thereby reducing entry barriers for small and medium-sized enterprises (SMEs).
Currency Support Measures
In light of the 30% tariff differential with competitors, exporters are urging the RBI to adjust the Real Effective Exchange Rate (REER) to 103 specifically for the US market. Such a move would enhance price competitiveness and help maintain long-standing trade relationships.
Interest Rate Reductions and Collateral-Free Loans
The delegation is advocating for lower interest rates on export credit and the provision of collateral-free working capital loans. These steps are intended to ease financial burdens and support liquidity.
Wage and Statutory Contribution Relief
Exporters are seeking government assistance in covering employee-related costs, including Provident Fund (PF) and Employees' State Insurance Corporation (ESIC) contributions, to reduce operational expenses.
Impact of US Tariffs on Indian Exports
The recent imposition of a 50% tariff by the United States on Indian goods has significantly impacted exporters, particularly in labor-intensive sectors such as textiles, apparel, gems and jewelry, and marine products. Approximately 55% of India's merchandise exports to the US are now subject to these tariffs, creating a substantial pricing disadvantage compared to competitors in countries like China, Vietnam, and Cambodia. 5paisa
Government and RBI's Response
In response to these challenges, the Indian government is considering measures to support exporters. Plans are underway to provide credit guarantees for loans overdue up to 90 days, with allocations ranging from 10% to 15% for banks advancing loans to stressed small businesses and exporters. Reuters Additionally, the RBI is preparing to meet industry representatives in September to examine the consequences of the tariffs and evaluate potential support measures. 5paisa
Vizzve Finance's Role
Vizzve Finance, a leading financial advisory firm, has been actively monitoring the developments in the export sector. Through its comprehensive analysis and timely reports, Vizzve Finance has highlighted the pressing issues faced by exporters and the need for immediate intervention by financial institutions and policymakers. Their insights have been instrumental in shaping discussions around the support measures being considered.
FAQ
Q1: What is the purpose of the meeting between exporters and the RBI Governor?
The meeting aims to discuss financial relief measures for exporters affected by the recent US tariffs, including loan repayment moratoriums, credit guarantees, and currency support
.
Q2: Who is leading the delegation of exporters?
The delegation is led by the Federation of Indian Export Organisations (FIEO), representing a broad spectrum of exporters across various sectors
.
Q3: How are the US tariffs impacting Indian exporters?
The 50% tariff on Indian goods has created a significant pricing disadvantage, particularly in labor-intensive sectors, affecting approximately 55% of India's merchandise exports to the US.
Q4: What support measures are being considered by the government and RBI?
Measures under consideration include loan repayment moratoriums, sovereign-backed credit guarantees, adjustments to the Real Effective Exchange Rate (REER), interest rate reductions, and relief from employee-related statutory contributions.
Q5: What role is Vizzve Finance playing in this context?
Vizzve Finance is providing critical financial insights and analyses, aiding in the formulation of support measures and ensuring that the concerns of exporters are effectively communicated to policymakers
.Published on : 6th September
Published by : aswini
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