The Federation of Indian Export Organisations (FIEO) welcomed the Reserve Bank of India’s decision to reduce the repo rate by 25 basis points, describing it as a timely and encouraging step that will enhance export competitiveness and ease liquidity constraints across the exporting community.
FIEO President, Mr S C Ralhan, lauded the move, noting that a reduction in borrowing costs comes at a crucial moment for Indian exporters navigating volatile global demand and fluctuating input prices. “We appreciate the RBI’s timely intervention. A 25-bps cut in the repo rate will significantly lower the cost of credit for exporters, enabling them to invest more freely in working capital, technology upgradation, and international marketing efforts. This is a much-needed boost at a time when global demand is volatile and input costs remain unpredictable,” he said.
Mr Ralhan emphasized that lower interest rates will ease the burden of trade financing, support higher production levels, and encourage diversification across export-oriented sectors. For MSME exporters in particular, improved liquidity and reduced financing costs will translate into strengthened cash flows, more competitive margins, and greater capacity to scale operations and enter new international markets.
According to FIEO, the rate cut is expected to generate several positive ripple effects for the export ecosystem. Exporters availing pre- and post-shipment credit will benefit from reduced financing costs, improving profitability and reducing reliance on high-cost credit instruments. Easier access to funds will also help streamline working capital cycles, allowing timely procurement of raw materials, better inventory management, and smoother fulfilment of export orders. Additionally, lower interest rates may encourage industry-wide expansion and modernization, fostering higher value addition and supporting the government’s broader export-promotion objectives. As liquidity improves, exporters may also be better positioned to diversify into new product segments, adopt advanced technologies, and explore untapped global markets—strengthening the resilience and breadth of India’s export basket.
Mr. Ralhan urged banks and financial institutions to ensure that the benefits of the rate cut are passed on swiftly and fully to exporters through reduced lending rates and faster credit disbursal, enabling the sector to realize the full impact of the monetary easing.
In an environment marked by global economic uncertainty and increasing competition, FIEO considers the RBI’s rate cut a welcome relief. The organization remains optimistic that, combined with supportive fiscal and trade policies, this measure will help Indian exporters build scale, sharpen competitiveness, and contribute to sustained export growth in the coming quarters.
