FIEO Seeks RBI Extension of Export Credit Period to 450 Days Amid Repo Rate Hike

New Delhi, Oct 8 (KNN) The Federation of Indian Export Organisations (FIEO) has urged the Reserve Bank of India (RBI) to extend the pre-shipment and post-shipment export credit period from the existing 270 days to 450 days, citing longer transit times, logistics disruptions and delayed realisation of export proceeds.

The demand follows the RBI's decision to raise the policy repo rate by 25 basis points to 5.5 per cent and shift its monetary policy stance to calibrated tightening.

FIEO President S C Ralhan said the rate hike was understandable amid rising inflationary pressures and the need to maintain price stability, but cautioned that higher borrowing costs could increase the financial burden on exporters, particularly micro, small and medium enterprises (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 added.

He highlighted that higher interest costs could hurt the competitiveness of exporters operating on thin margins, while monetary tightening could constrain working capital availability.

India's economy has shown resilience, with GDP growing 7.8 per cent in Q1 FY27, while merchandise and services exports have maintained strong momentum, he noted.

FIEO Seeks Flexible Export Finance

Ralhan said extending the export credit period to 450 days would provide exporters greater breathing space to manage longer shipping and payment cycles and fulfil international commitments without undue financial stress.

FIEO also called for targeted liquidity support and adequate availability of affordable export credit alongside the calibrated tightening stance.

“This would help exporters absorb elevated input and financing costs while maintaining production, fulfilling overseas orders and exploring new markets,” Ralhan said.

The exporters' body also noted that US tariffs on Indian goods have fallen from a peak of 50 per cent to around 10-18 per cent, while the India-UK trade pact has removed an earlier apparel duty disadvantage. Improved access under the India-EU FTA, covering a market estimated at around 200 billion euros, could further strengthen India's position as global brands diversify sourcing away from China.

(KNN Bureau)