Module: General Practice
Q18: With reference to the October 2025 Amendment regarding Merchanting Trade Transactions (MTT), the Reserve Bank of India extended the permissible time period for the "Foreign Exchange Outlay" (the gap between import payment and export receipt). What is the new limit?
✅ Correct Answer: C
The Concept: Merchanting Trade involves an Indian intermediary buying goods from Country A and selling them to Country B, without the goods entering India.
The Change: Previously, the "Outlay of Foreign Exchange" (i.e., the period during which the Indian merchant's funds are blocked/remitted for import before receiving export proceeds) was restricted to 4 months.
The Update (2025): To provide flexibility, RBI extended this outlay period to 6 months.
Total Cycle: The overall cycle for the completion of the entire transaction (shipment to realization) generally remains 9 months.
The Change: Previously, the "Outlay of Foreign Exchange" (i.e., the period during which the Indian merchant's funds are blocked/remitted for import before receiving export proceeds) was restricted to 4 months.
The Update (2025): To provide flexibility, RBI extended this outlay period to 6 months.
Total Cycle: The overall cycle for the completion of the entire transaction (shipment to realization) generally remains 9 months.