RBI Trade Relief Measures: Moratorium, Extended Credit Tenor & Support for Exporters

RBI Trade Relief Measures

RBI Trade Relief Measures Latest News

  • The RBI has introduced immediate trade relief measures to help exporters struggling with debt servicing amid global trade disruptions. 
  • These include a loan moratorium, longer export credit tenors, and relaxed asset classification norms, applicable to banks, NBFCs, cooperative banks, and all-India financial institutions.
  • The announcement follows signals from the US about reducing high tariffs on India. 
  • Key exporting sectors such as chemicals, plastics, rubber, leather, apparel, footwear, iron and steel products, and electrical machinery are covered under RBI’s relief framework.

RBI Unveils Relief Package for Tariff-Hit Exporters

  • The RBI announced a series of trade relief measures to ease working capital stress, enhance borrowing access, and defer repayments for exporters affected by global trade disruptions. 
  • These measures, effective immediately, cover 20 tariff-hit export sectors including chemicals, plastics, textiles, leather, metals, machinery, vehicles, footwear, and fisheries.
  • These steps aim to ease compliance pressures for exporters facing global trade disruptions.

Loan Moratorium to Ease Debt Burden

  • The RBI has announced a moratorium on term loan repayments and interest recovery for working capital loans due between September 1 and December 31, 2025. 
  • During this period, interest will accrue only on a simple interest basis, with no compounding.
  • Accrued interest will be converted into a funded interest term loan, repayable between April and September 2026. 
  • For working capital loans, lenders may revise drawing power or reassess limits to support affected borrowers.

Improved Access to Working Capital

  • The RBI has increased the maximum repayment period for pre-shipment and post-shipment export credit from 270 days to 450 days for loans disbursed up to March 31, 2026.
  • For packing credit availed before August 31, 2025, where shipments could not occur, lenders may permit repayment through legitimate alternative sources, including domestic sales or proceeds from substitute export orders.

Safeguards for Asset Quality

  • The RBI announced that any moratorium or deferment granted will not count toward days past due.
  • With this, it ensured that borrowers’ accounts are not downgraded under Income Recognition, Asset Classification and Provisioning (IRACP) norms. 
  • These relief actions — including revised drawing power — will not be treated as restructuring, and Credit Information Companies must ensure borrowers’ credit histories remain unaffected.
  • Only exporters with standard asset classification as of August 31, 2025, are eligible.
  • Relief measures will require 5% provisioning on such loans, though analysts say this is unlikely to significantly impact profitability.
  • Lenders must adopt a formal policy defining eligibility and publicly disclose criteria.

Relaxations Under FEMA for Export Realisation

  • The RBI extended the deadline for realising export proceeds from 9 to 15 months.
  • It also increased the shipment period against advance payments from 1 to 3 years, easing compliance pressures for exporters facing delays.

Recent Government Measures to Boost Export Ecosystem

  • The government has extended key timelines to ease pressures on exporters: 
    • the period for realisation and repatriation of export proceeds has been increased from 9 to 15 months;
    • the shipment window for goods against advance payments has been extended from 1 to 3 years.
  • In addition, the Union Cabinet approved two major initiatives worth ₹45,060 crore to strengthen India’s export ecosystem. 
  • These include: 
  • Industry leaders say these measures will particularly benefit MSMEs facing tariff-related disruptions, enhance market access, ease liquidity constraints, and address longstanding challenges in logistics, credit availability, and export infrastructure.

Source: TH | IE | LM

RBI Trade Relief Measures FAQs

Q1: What are the key RBI trade relief measures announced in 2025?

Ans: RBI introduced a loan moratorium, extended export credit tenor to 450 days, relaxed asset classification norms, and eased FEMA rules to support tariff-hit exporters.

Q2: Which sectors benefit from RBI’s trade relief package?

Ans: Twenty sectors, including chemicals, plastics, textiles, leather, footwear, metals, machinery, vehicles, and fisheries, are eligible for relief due to global tariff disruptions.

Q3: How does the RBI moratorium help exporters?

Ans: Exporters can defer loan and interest payments from September to December 2025, with simple interest charged and repayment scheduled between April and September 2026.

Q4: What changes did the RBI make to export credit norms?

Ans: RBI extended pre- and post-shipment credit repayment from 270 to 450 days and allowed liquidation of packing credit through legitimate alternative sources.

Q5: What government measures complement RBI’s relief steps?

Ans: The government extended export realisation timelines, expanded shipment windows, and approved ₹45,060 crore initiatives including CGSE and the Export Promotion Mission to boost liquidity.

Why Germany’s Economy Is Stagnating and the Reforms Needed for Recovery

Germany Economic Stagnation

Germany Economic Stagnation Latest News

  • Germany, the world’s third-largest economy with a $5 trillion GDP, is experiencing near-zero growth this year, with output expected to rise only 0.2%
  • This stagnation follows two consecutive years of recession, marking a prolonged period of weak economic performance. 
  • These findings come from the annual report of the German Council of Economic Experts, an independent body established in 1963 to assess the country’s macroeconomic trends.

Germany’s Return as the “Sick Man of Europe”

  • Germany is again being labelled the “sick man of Europe,” with chronic stagnation requiring long-term structural reforms. 
  • The economy has grown only 0.1% since 2019, far below the US and euro area. Forecasts remain bleak, with potential growth expected at just 0.4% per year.

New Economic Challenges: From Worker Shortages to Rising Labor Costs

  • Unlike the early 2000s, Germany now faces worker shortages, not job scarcity.
    • 20 million workers will retire in the next decade, while only 12.5 million will enter the labor force.
    • Aging populations mean fewer hours worked and higher labor costs.
    • Unit labor costs have risen due to sluggish productivity and higher wages.
  • Employment stability measures like short-time work hinder structural change by discouraging worker mobility into more productive sectors.

Manufacturing Decline and High Energy Costs

  • Germany’s manufacturing sector—once the engine of growth—has been declining since 2018.
  • Key factors:
    • Loss of competitiveness
    • Weak foreign demand
    • Rising trade fragmentation
    • Threat of US tariffs
    • Competition from China
  • Energy-intensive industries have suffered from persistently high energy costs, making Germany less attractive for emerging sectors like AI and data centers.

Dependence on Legacy Industries and Weak Capital Markets

  • Germany’s strength in automotive, chemicals, and mechanical engineering has created over-reliance on legacy “mid-tech” sectors. 
  • This limits diversification into high-tech fields like IT and biotechnology.
  • Capital markets remain shallow:
    • Heavy dependence on banks
    • Insufficient venture capital, especially for scale-ups
    • Lack of large institutional investors willing to back European funds
  • This pushes promising start-ups to relocate to the US.

Germany’s Economy Falling Behind Europe and the World

  • Germany is no longer leading the euro area; instead, it is lagging behind both European and global growth averages. 
  • The German Council of Economic Experts attributes the slowdown to a combination of cyclical weaknesses, structural challenges, and major geopolitical shifts that have disrupted the traditional German export-driven model.

Geopolitical Shifts Undermining Germany’s Economic Model

  • A key disruption has been the change in US leadership and America’s reduced willingness to provide economic and security guarantees to allies like Germany. 
  • This has forced Berlin and other European countries to reconsider their security frameworks and allocate more resources to defence and trade resilience.
  • Fragmentation within the European Single Market has also prevented EU nations from crafting strong collective responses to global challenges, weakening competitiveness.

Domestic Challenges Intensifying the Slowdown

  • Germany faces internal pressures as well:
    • Declining industrial competitiveness
    • Rapid demographic ageing
    • Weak implementation of Chancellor Friedrich Merz’s fiscal package despite ambitious promises for infrastructure and defence investments

Policy Recommendations to Boost Growth

  • The German Council of Experts suggests four key steps:
    • Better targeted fiscal spending to increase productive investment.
    • Stronger European economic integration, removing barriers to a true single market for goods and services.
    • Corporate tax cuts to incentivise business investment.
    • Reducing wealth inequality, including a state-subsidised long-term investment account to improve financial security, especially for older citizens.
  • If Germany fails to revive growth soon, India — with a GDP nearing $4 trillion — may surpass it to become the world’s third-largest economy.

Source: IE | IMF

Germany Economic Stagnation FAQs

Q1: Why is Germany’s economy considered the ‘sick man of Europe’ again?

Ans: Germany has seen near-zero growth since 2019, faces aging workforce pressures, rising labour costs, and declining competitiveness, leading to prolonged economic stagnation.

Q2: What structural challenges are slowing Germany’s growth?

Ans: Labour shortages, demographic ageing, high energy prices, manufacturing decline, and dependence on mid-tech industries are key structural issues weakening economic performance.

Q3: How do high energy costs affect Germany’s economy?

Ans: Elevated energy prices have reduced industrial output, discouraged new investments, and made Germany less attractive for energy-intensive sectors like AI and data centres.

Q4: Why are weak capital markets a barrier to innovation in Germany?

Ans: Germany relies heavily on bank financing, lacks large venture capital funds, and sees startups move to the US for deeper markets and better exit opportunities.

Q5: What reforms could help revive Germany’s economic growth?

Ans: Experts recommend targeted fiscal investments, deeper EU market integration, corporate tax cuts, stronger capital markets, and policies addressing labour shortages through childcare, migration, and flexible retirement.

Belem Health Action Plan Launched at COP30 – Explained

COP30

COP30 Latest News

  • At COP30 in Belem, global philanthropies pledged $300 million and launched the Belem Health Action Plan to tackle the growing health impacts of climate change through integrated adaptation measures.

Introduction

  • The intersection of climate change and public health took centre stage at the 30th UN Climate Conference (COP30) in Belem, Brazil, as global leaders, philanthropies, and health experts launched the Belem Health Action Plan (BHAP)
  • The plan aims to strengthen health systems to withstand the escalating effects of climate change.
  • Accompanying this initiative, a coalition of more than 35 major philanthropic organisations, including Bloomberg Philanthropies, Gates Foundation, Rockefeller Foundation, and IKEA Foundation, announced a $300 million commitment under the Climate and Health Funders Coalition to address the dual crisis of climate and health.
  • It is the first coordinated global effort to channel adaptation finance specifically towards climate-linked health outcomes, placing human well-being at the core of climate action.

Background: The Health Cost of Climate Change

  • Climate change has emerged as the gravest health threat of the 21st century, worsening air pollution, intensifying heatwaves, and driving the spread of infectious diseases. 
  • The 2025 Lancet Countdown Report on Health and Climate Change has become a key reference for the initiative. According to the report:
    • Heat-related deaths have surged by 23% since the 1990s, now reaching 546,000 deaths annually.
    • Over 154,000 deaths were linked to wildfire smoke exposure in 2024 alone.
    • The global dengue transmission potential has risen by 49% since the 1950s.
  • Experts warn that every country is now facing health impacts from climate change, with 3.3 billion people globally at heightened risk, especially those in low- and middle-income nations where health infrastructure remains fragile.

Launch of the Belem Health Action Plan

  • The BHAP was launched by 80 countries and organisations at COP30, building on findings from the Lancet Countdown report. 
  • It seeks to integrate climate adaptation with public health strategies, making health systems more resilient, equitable, and climate-ready.
  • Core Focus Areas of the BHAP
    • Building Climate-Resilient Health Systems: Strengthening surveillance, early warning, and response systems to handle heatwaves, floods, vector-borne diseases, and air pollution.
    • Investing in Research and Innovation: Supporting research into climate-sensitive diseases and developing adaptive technologies for healthcare delivery.
    • Health Equity and Justice: Ensuring vulnerable communities, such as children, women, outdoor workers, and low-income groups, receive targeted support.
    • Capacity Building: Enhancing healthcare workforce training to manage climate-related emergencies.
    • Integrated Policy Frameworks: Aligning climate, health, and development policies across countries for coordinated action.
  • The Plan also calls for “shifting funding and power to communities most affected by climate change,” ensuring that adaptation resources directly benefit those on the frontlines.

Philanthropic Commitment

  • The Climate and Health Funders Coalition, comprising over 35 leading philanthropic entities, pledged an initial $300 million to implement the Belem Health Action Plan and accelerate climate-health solutions. The inaugural funding will focus on:
    • Extreme heat mitigation and development of early warning systems.
    • Reducing air pollution, particularly from urban and industrial emissions.
    • Combating climate-sensitive infectious diseases such as malaria, dengue, and cholera.
    • Integrating climate and health data systems to enable better risk forecasting and resource allocation.

Addressing the Adaptation Finance Gap

  • A recurring theme at COP30 was the severe adaptation finance gap
  • According to the UN Adaptation Gap Report 2025, developing countries will require $310-365 billion annually by 2035 to adapt effectively to climate change. 
  • Yet, current funding flows hover around $40 billion per year, far below what is needed.
  • In India’s case, the 2023 National Communication to the UNFCCC estimated that the country will need $643 billion by 2030 to meet its adaptation goals. 
  • India has already spent $146 billion in 2021-22, representing 5.6% of GDP, up from 3.7% in 2015-16, underscoring its commitment to climate adaptation.
  • The BHAP and the accompanying philanthropic pledge are designed to narrow this gap, particularly by directing funds towards health-related adaptation, which has traditionally received limited attention.

Global Impact and Collaborative Framework

  • The BHAP underscores the principle that “protecting the environment is protecting people’s health.” 
  • It introduces a multi-sectoral approach where health ministries, climate departments, and global agencies collaborate to:
    • Mainstream health into climate policies.
    • Foster cross-country sharing of data and best practices.
    • Develop global standards for measuring health impacts of climate change.
  • By prioritising health in climate discussions, COP30 has expanded the definition of climate adaptation, from protecting ecosystems to safeguarding human life and well-being.

Source: IE | DowntoEarth

COP30 FAQs

Q1: What is the Belem Health Action Plan?

Ans: It is a global framework launched at COP30 to strengthen health systems and promote health equity amid climate change impacts.

Q2: How much funding was announced for climate-health action at COP30?

Ans: Over $300 million was pledged by the Climate and Health Funders Coalition comprising 35 global philanthropies.

Q3: What are the main focus areas of the Belem Health Action Plan?

Ans: Key areas include climate-resilient health systems, research, health equity, and early warning systems for climate-related health threats.

Q4: Why is climate change considered a public health crisis?

Ans: Rising temperatures, air pollution, and extreme weather are increasing disease spread, malnutrition, and heat-related deaths globally.

Q5: How does the Belem Health Action Plan address global inequality?

Ans: It prioritises low- and middle-income countries and vulnerable communities disproportionately affected by climate change.

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