RBI-Export & Import of Goods and Services Regulations under FEMA

1. Executive Summary

The Reserve Bank of India issued Notification No. FEMA 23(R)/2026-RB dated January 13, 2026, superseding the 2015 Export Regulations. The Regulations are effective from October 1, 2026.

The 2026 framework integrates export and import compliance into a single structure, strengthens digital monitoring systems, enhances accountability of Authorised Dealer (AD) Banks, and introduces structured compliance relief for smaller transactions.

The objective is to modernise India’s foreign exchange trade ecosystem through transparency, operational flexibility, and risk-based supervision.

2. Key Regulatory Provisions

2.1 Declaration of Exports (EDF)

• EDF is mandatory for goods at the time of export.
• For services, EDF must be filed within 30 days from the end of the month in which the invoice is raised.
• Multiple service exports in a month may be consolidated.
• Shipping bill at EDI ports is deemed as EDF.

2.2 Manner of Receipt and Payment

• Transactions must comply with FEMA (Manner of Receipt and Payment) Regulations, 2023.
• AD Banks must verify genuineness before credit/debit.
• Simultaneous reporting in EDPMS/IDPMS is mandatory.

2.3 Small Value Relaxation (₹10 Lakh)

• Transactions up to ₹10 lakh may be closed based on declaration.
• Quarterly bulk closure is permitted.
• Provides significant compliance relief for MSMEs.

2.4 Time Period for Export Realisation

• 15 months from shipment (goods) or invoice (services).
• 18 months if invoiced in INR.
• Extensions may be granted by AD Banks.

2.5 Reduction in Export Realisation

• AD Banks may permit reduction or non-realisation if justified.
• Small value transactions may be approved based on declaration.

2.6 Set-Off Mechanism

• Export receivables may be set-off against import payables.
• Must involve same overseas party or group entity.
• Subject to permitted timelines.

2.7 Third Party Payments

• Third-party receipts and payments are permitted.
• Subject to AD Bank verification of bona fides.

2.8 Advance and Delayed Payments

• Advance receipts and payments must be routed through the same AD.
• Standby LC or guarantee may be required for high-value advances.
• Interest ceilings linked to trade credit norms.

2.9 Time Period for Import Payments

• Import payments must be made within contractual timelines.
• AD Banks monitor through IDPMS.
• Extensions may be granted upon justification.

2.10 Import of Gold and Silver

• Advance remittance generally prohibited.
• Permitted only if specifically allowed under regulations.

2.11 Import Not Materialised

• Advance must be repatriated if import does not materialise.
• Failure triggers requirement of standby LC or guarantee for future advances.

2.12 Unrealised Exports

• If unrealised beyond one year from due date,
• Future exports allowed only against advance or irrevocable LC.

2.13 Export Against State Credits

• Must comply with RBI directions regarding inter-bank arrangements.

2.14 Project Exports

• AD Banks may permit as per contract terms.
• Temporary surplus abroad may be invested in short-term instruments (≤1 year).

2.15 International Trade Settlement in INR

• Governed by RBI INR settlement framework.
• Supports INR internationalisation.

2.16 Merchanting Trade Transactions (MTT)

• Both legs must be completed within 6 months.
• AD Banks must monitor and close EDPMS/IDPMS entries.

2.17 Reporting and Internal SOP

• Mandatory reporting in EDPMS, IDPMS, and FETERS.
• Comprehensive internal policy and SOP required.
• Charges must be reasonable; no penalty for regulatory delays attributable to constituents.

3. Impact Assessment

3.1 Impact on Exporters

• Extended realisation timelines.
• Simplified small-value compliance.
• Stricter discipline for unrealised exports.

3.2 Impact on Importers

• Clearer advance remittance safeguards.
• Monitoring of contractual timelines.
• Restrictions on bullion advance payments.

3.3 Impact on Authorised Dealers

• Higher compliance and monitoring responsibility.
• Mandatory governance and reporting systems.

3.4 Impact on MSMEs

• Reduced compliance burden.
• Ease of doing business improvements.

Conclusion

The FEMA 2026 Regulations represent a comprehensive restructuring of India’s foreign exchange trade regime. The framework balances facilitation with regulatory discipline, strengthens digital monitoring, enhances accountability of AD Banks, and supports global trade flexibility.

Comparative Analysis – FEMA 2015 vs FEMA 2026

Comparative Analysis – FEMA 2015 vs FEMA 2026