Hi @sai-bodhanapu,
I'm sorry for the delay.
Are all the clocks needed by the application in the CORE_STANDBY mode enabled?
For example, in the attached test project, the S32K312 CM7_0 wakes up through an EMIOS_0 interrupt and toggles GPIOs.
So I need these modules to be clocked.

The CORE_STANDBY mode just reconfigures clocks and executes the WFI instruction (Wait For Interrupt). This is not a system standby mode.
Regards,
Daniel