The Reserve Bank of India's latest set of export relief measures may put near-term pressure on the rupee, according to several bankers, who caution that the extended payment realisation window could prompt exporters to delay repatriating foreign earnings. The central bank on Friday offered additional flexibility to exporters as part of its response to US tariff pressures, including extending the export realisation timeline to 15 months from the earlier 9 months.

The relaxation, part of a broader package of trade support measures, also includes easier credit conditions and greater repayment flexibility for exporters, many of whom have been hit by the recent escalation in US duties. The move comes as India’s trade outlook faces headwinds from stalled negotiations on tariff rollbacks, with the 50 percent levies on several Indian products continuing to impact shipments. In September, exports to the United States—India’s single largest market—fell nearly 12 percent year-on-year.

Bankers say that while the measures may provide operational relief to exporters, they could also delay the inflow of foreign exchange. With exporters no longer obligated to convert receipts within nine months, many are expected to hold on to proceeds longer, especially amid a weakening rupee. “Exporters, already cautious about forward hedges, now have additional leeway to push back conversions,” said a senior treasury official at a private sector bank. “This could chip away at near-term FX supply and leave the rupee slightly more vulnerable.”

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The rupee remains among Asia’s worst-performing currencies this year, having weakened around 3.5 percent to trade near 88.62 against the US dollar, close to its late-September record low of 88.80. Economists said the RBI’s latest move is primarily aimed at cushioning exporter sentiment rather than boosting short-term inflows. Dhiraj Nim, economist and FX strategist at ANZ Bank, said, “The extended realisation window offers modest relief, but it’s something the RBI can manage using other tools.”

Others believe the steps reflect a pragmatic balancing act between trade support and currency management. Gaura Sen Gupta, economist at IDFC FIRST Bank, said, “The RBI’s relief is more about maintaining the flow of funds to the export sector amid tariff-related headwinds.” Analysts expect the central bank to closely monitor the pace of incoming conversions and intervene if dollar flows slow sharply, especially as global trade uncertainties persist.

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