RBI’s trade-relief measures to partly ease liquidity pressure on MECs: Ind-Ra
November 27, 2025
The Reserve Bank of India’s (RBI) recent relief measures for eligible exporters will partially ease near-term liquidity pressure due to trade disruption on mid and emerging corporates (MECs).
The Reserve Bank of India’s (RBI) recent relief measures for eligible exporters will partially ease near-term liquidity pressure due to trade disruption on mid and emerging corporates (MECs). However, these entities’ sustainability and solvency depend on reversing trade measures, gradually recovering lost revenue and finding alternative markets to service the debt maturing in 2027, India Ratings and Research (Ind-Ra) said.
According to Ind-Ra, the RBI’s loan repayment deferral significantly offsets vulnerable export EBITDA for eligible sub-investment grade issuers in its portfolio due to trade issues.
The impact of RBI incentives varies across sectors: they cover over 50% of the vulnerable export EBITDA in the textile sector, whereas in the industrial products sector, it covers about 30%, it said.
Ind-Ra estimates a potential benefit of around ₹420 crore (through debt liability deferrals) for eligible exporters through debt liability deferrals, against a vulnerable export EBITDA of nearly ₹750 crore.
This shortfall can be addressed by temporary fund infusions from promoters, leveraging funds from reduced working capital margins or deferring planned capex, it said.
“For sub-investment grade entities, which are more prone to defaults, the relief significantly offsets vulnerable export EBITDA. Conversely, for investment-grade entities with robust liquidity profiles, this scheme may not be relevant within Ind-Ra’s MEC portfolio,” it said.
Among the Ind Ra-rated MECs, sectors such as textiles, industrial products, export-oriented jewelry and gems, auto components, and food products are particularly vulnerable.
This is because their substantial export activities to the U.S. exposing them to tariffs.
“The RBI incentives are likely to provide much-needed respite and aid liquidity in FY26 especially for sub-investment grade issuers. However, recovery in export performance will be crucial as additional debt repayments from the moratorium are anticipated during 1HFY27”, said Abhash Sharma, Director, Corporates, Ind-Ra.
In addition to the moratorium, the RBI has introduced measures to enhance liquidity such as recalculating drawing power by reducing margins or reassessing working capital limits, and extending the credit period for pre-shipment and post-shipment export credit to up to 450 days for disbursements made until 31 March 2026.
The benefits of this scheme will largely depend on their timely implementation by banks and financial institutions, particularly in establishing effective systems and processes for smooth operations in the near to medium term, the rating agency said.
According to Ind-Ra, the RBI’s loan repayment deferral significantly offsets vulnerable export EBITDA for eligible sub-investment grade issuers in its portfolio due to trade issues.
The impact of RBI incentives varies across sectors: they cover over 50% of the vulnerable export EBITDA in the textile sector, whereas in the industrial products sector, it covers about 30%, it said.
Ind-Ra estimates a potential benefit of around ₹420 crore (through debt liability deferrals) for eligible exporters through debt liability deferrals, against a vulnerable export EBITDA of nearly ₹750 crore.
This shortfall can be addressed by temporary fund infusions from promoters, leveraging funds from reduced working capital margins or deferring planned capex, it said.
“For sub-investment grade entities, which are more prone to defaults, the relief significantly offsets vulnerable export EBITDA. Conversely, for investment-grade entities with robust liquidity profiles, this scheme may not be relevant within Ind-Ra’s MEC portfolio,” it said.
Among the Ind Ra-rated MECs, sectors such as textiles, industrial products, export-oriented jewelry and gems, auto components, and food products are particularly vulnerable.
This is because their substantial export activities to the U.S. exposing them to tariffs.
“The RBI incentives are likely to provide much-needed respite and aid liquidity in FY26 especially for sub-investment grade issuers. However, recovery in export performance will be crucial as additional debt repayments from the moratorium are anticipated during 1HFY27”, said Abhash Sharma, Director, Corporates, Ind-Ra.
In addition to the moratorium, the RBI has introduced measures to enhance liquidity such as recalculating drawing power by reducing margins or reassessing working capital limits, and extending the credit period for pre-shipment and post-shipment export credit to up to 450 days for disbursements made until 31 March 2026.
The benefits of this scheme will largely depend on their timely implementation by banks and financial institutions, particularly in establishing effective systems and processes for smooth operations in the near to medium term, the rating agency said.