<h1>RBI Updates Merchanting Trade Guidelines: Extends Trade Period, Allows Short-Term Financing, and Enhances Reporting by Banks.</h1> The Reserve Bank of India has issued revised guidelines for Merchanting Trade Transactions, updating the previous 2003 guidelines. Merchanting trade involves Indian residents purchasing goods from non-residents and reselling them to other non-residents without the goods entering India. Although not contributing to Indian exports, these transactions bring net foreign exchange inflows. Following recommendations from a technical committee, the guidelines now extend the trade period from six to nine months and allow short-term financing for both export and import legs. Additionally, Authorized Dealer Banks must report outstanding merchanting trade transactions biannually for improved monitoring.