India Inc knocks on RBI door for US tariff buffer

Major export organisations and industry associations met Reserve Bank of India (RBI) Governor Sanjay Malhotra on Thursday and sought several relaxations to mitigate the adverse impact of the 50 per cent tariff imposed by the US on a majority of Indian products.

- SUBRATA PANDA & SHREYA NANDI

Their demands included a one-year moratorium on loan repayments, a collateral-free credit scheme, relaxation of non-performing asset (NPA) norms, and extensions on due dates without penalties.

During the two-hour meeting in Mumbai, the industry bodies and exporters also proposed that the central bank allow settlement of exports at the real effective exchange rate (REER), instead of the normal exchange rate by converting the US dollar into rupees. Additionally, they urged the RBI to let the domestic currency depreciate freely so that exporters could recoup some of the losses they will incur due to the tariffs imposed by the Trump administration.

Apart from US export-specific challenges, exporters sought additional support from Indian banks through increased lending to the sector by creating a sub-category under priority sector lending (PSL) norms. Although exports are part of PSL, bank funding to the sector remains muted,