RBI extends export realisation timeline amid persistent global disruptions, supply chain risks, Pg17

Key Highlights:

• The RBI has extended the export realisation timeline due to ongoing geopolitical uncertainties and supply chain disruptions in West Asia.
• The permissible period for realisation of export value remains at 15 months from the export date.
• Enhanced export credit period of 450 days now applies to disbursals made until June 30, 2026.
• India's total exports for February 2026 are estimated at $76.13 billion, a growth of 11.05% compared to February 2025.

Detailed Insights:

• The RBI had previously extended the export realisation timeline in November 2025 from nine to 15 months in response to initial disruptions.
• Logistical bottlenecks and uncertainties arising from the West Asia crisis have made it difficult for exporters to meet prescribed timelines.
• Key shipping routes like the Strait of Hormuz have become hazardous, leading to delays, higher freight costs, and increased insurance premiums.
• The RBI has instructed banks to limit their net open exposure to the currency in the foreign exchange market to $100 million by the end of each day, with compliance required by April 10, 2026.

Key Concepts Involved:

• Export Realisation: The process of receiving payment for goods or services exported to another country.
• Pre-shipment & Post-shipment Export Credit: Loans provided to exporters before and after the shipment of goods, respectively.
• Net Open Exposure (NOE): The difference between a bank's assets and liabilities in foreign currencies, indicating its risk to exchange rate fluctuations.