Exporters seek 6-month loan moratorium, higher credit as $66 billion West Asia trade faces disruption

Exporters have urged the government and the Reserve Bank of India (RBI) to offer a six-month moratorium on loan repayments, along with increased credit limits and longer loan tenures, as concerns mount over the impact of the West Asia conflict on shipments during March.

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The move comes amid indications that policymakers are considering a relief package to support exporters during the current disruptions.


During discussions with the RBI, exporters proposed measures similar to the relief extended last year following the imposition of 50% tariffs on Indian goods by the United States.

“The moratorium on principal and interest repayments announced by RBI for October–December 2025 for sectors affected by US tariffs may kindly be expanded,” the Federation of Indian Export Organisations (FIEO) said in its submission.

“It would be helpful if the moratorium were extended to cover the first and second quarters of 2026 and made applicable across export sectors currently facing logistics-related disruptions.”

The meeting follows consultations with the Department of Financial Services and the Indian Banks’ Association last week. Exporters also called for a more flexible framework for restructuring short-term export credit to ease temporary cash flow pressures arising from extended payment cycles.

The commerce department is reportedly exploring insurance-related measures to support exporters. “Hopefully within this week, we will provide a detailed briefing on the steps being taken to support exports during this troubled time,” commerce secretary Rajesh Agrawal told reporters, as per TOI.

West Asia is India’s second-largest export destination after the European Union, accounting for over 15% of the country’s outbound shipments. In 2025, exports to the region were valued at nearly $66 billion. Agrawal cautioned that logistical challenges caused by the disruption of the Strait of Hormuz may lead to a “southward trend” in exports this month.

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“The movement of ships and even air cargo is facing certain challenges. Indian exports to the region will be affected, as will their imports from India, which rely on multiple product categories,” he said, adding that authorities are hopeful of closing the year with export growth.

Data for February highlights the current stress: exports remained largely flat, declining 0.8% to $36.6 billion, while imports surged 24% to $63.7 billion, driven largely by precious metals. Gold imports more than tripled to $7.4 billion, and silver imports nearly quadrupled to $1.7 billion.

(With inputs from TOI)