The Reserve bank on Monday brought down the period of realisation and repatriation for exporters of goods and software to nine months from earlier 12 months, a move which could shore up foreign exchange inflows.
Last November, RBI had increased the time limit to bring in export earnings to 12 months, from six months at that time, in view of global slowdown. However, said industry experts, because of the country's worsening current account deficit and the weakening of the rupee against the dollar, it has now shortened the timeframe to bring in the money. "...It was decided, in consultation with the Government of India to bring down the above stated realisation period from 12 months to nine months from the date of export valid till September 30," RBI said in a notification.
It further said the provisions in regard to period of realisation and repatriation to India of the full export value of goods or software exported by a unit situated in a Special Economic Zone (SEZ) as well as exports made to warehouses established outside India remain unchanged.
India's exports contracted by 4.6 per cent, for the second consecutive month, to $23.79 billion in June compared to that in the year-ago period.
Declining exports and depreciating rupee against the dollar has put pressure on current account deficit. The rupee has depreciated by over 12 per cent against the dollar since the beginning of the fiscal. The Indian currency had hit a lifetime low of 61.21 a dollar on July 8, forcing the central bank and capital markets regulator Sebi to take unconventional measures to arrest the slide. The rupee today fell by 37 paise, its biggest drop in two weeks, to close at 59.72 following month-end dollar demand from oil importers and some custodian banks coupled with capital outflows.
During 2012-13 CAD, which is the difference between the outflow and inflow of foreign currency, hit a record high of 4.7 per cent of gross domestic product or $88 billion.