RBI export relief: Longer repatriation window may hit rupee; exporters may delay dollar conversions

The Reserve Bank of India’s latest export relief package could weigh on the rupee in the near term, with bankers warning that exporters may now delay bringing back their foreign earnings.The measures, announced on Friday, aim to help Indian exporters manage the impact of steep U.S. tariffs but may reduce immediate dollar supply in the market.The RBI has extended the export realisation window to 15 months from nine, eased credit requirements, and allowed greater repayment flexibility. The move comes as India’s trade outlook remains uncertain, with negotiations stalled on a US–India agreement that could reverse the 50% tariffs imposed by Washington in late August. Those duties have already pushed India’s September merchandise exports to the US down nearly 12% year-on-year.Bankers quoted by news agency Reuters said that the longer realisation window is likely to delay the return of export dollars. With exporters no longer bound to convert receipts within nine months, many may choose to hold on to proceeds or stagger their conversions, particularly with the rupee showing a weakening trend. A senior treasury official at a private bank said exporters now have “additional leeway to push back their conversions,” adding that this reduces near-term FX supply and increases vulnerability for the rupee.The currency, already one of Asia’s worst performers this year with a 3.5% decline, was trading at 88.62 to the US dollar — close to its record low of 88.80 hit in late September.As per Reuters, Dhiraj Nim, economist and FX strategist at ANZ Bank, said the longer repatriation window may prompt exporters to delay conversions but added, “It’s something that the RBI can manage using other tools.” Other economists said the steps are largely aimed at supporting sentiment.Gaura Sen Gupta of IDFC FIRST Bank said the measures were intended to maintain the flow of funds to the export sector despite tariff pressures, as per Reuters.