RBI Notifies New FEMA Rules for Export and Import of Goods and Services (2026)
The Reserve Bank of India (RBI) has notified the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, marking a significant update to India’s foreign trade regulatory framework. These regulations replace the earlier 2015 rules and are scheduled to come into force from 1 October 2026. The new framework aims to simplify procedures, improve compliance, strengthen monitoring of foreign exchange flows, and align regulations with the evolving needs of global trade.
Background and Objective
The regulations have been issued under the powers granted by the Foreign Exchange Management Act (FEMA), 1999. Their primary objective is to ensure timely realisation and repatriation of export proceeds, proper settlement of import payments, and transparent reporting of all cross-border trade transactions. By consolidating rules for both exports and imports of goods and services, RBI has introduced a more integrated and structured approach to foreign exchange management.
Export Declaration and Documentation
A key feature of the 2026 regulations is the continued emphasis on the Export Declaration Form (EDF). Exporters of goods must submit the EDF at the time of export, while exporters of services are required to submit it within 30 days from the end of the month in which the invoice is raised. For exporters providing services to multiple overseas clients in a single month, a consolidated EDF filing is permitted.
The responsibility of authenticating and forwarding EDFs lies with the specified authorities such as Customs, SEZ authorities, STPI, or Authorised Dealers, depending on the nature of export. This ensures that export values are properly declared and linked with banking records.
Manner of Receipt and Payment
All receipts and payments related to export and import transactions must be carried out strictly in accordance with the Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2023. Authorised Dealers play a critical role here—they are required to verify the genuineness of each transaction before crediting or debiting accounts.
To enhance monitoring, RBI has reinforced the use of EDPMS (Export Data Processing and Monitoring System) and IDPMS (Import Data Processing and Monitoring System). Transactions up to ₹10 lakh can be closed based on exporter or importer declarations, allowing operational ease for smaller trade values while maintaining accountability.
Time Limits for Realisation of Export Proceeds
The regulations clearly define timelines for export realisation:
Goods: Within 15 months from the date of shipment.
Services: Within 15 months from the date of invoice.
Exports invoiced or settled in INR: Extended period of 18 months.
For project exports, the realisation period is governed by contractual payment terms. Authorised Dealers are empowered to grant extensions in genuine cases, ensuring flexibility without diluting compliance.
Reduction, Set-off, and Third-Party Transactions
Recognising practical challenges in international trade, the regulations allow for:
Reduction in export realisation in cases of under-recovery, subject to Authorised Dealer approval.
Set-off of export receivables against import payables with the same overseas party or group entities.
Third-party receipts and payments, provided the bonafides of transactions are established.
These provisions provide exporters and importers with operational flexibility while maintaining regulatory safeguards.
Import Payments and Advance Remittances
Importers are required to settle payments within the time frame specified in the underlying contract. Authorised Dealers are responsible for monitoring pending import payments through IDPMS.
While advance payments for imports are permitted, the regulations strictly prohibit advance remittance for import of gold and silver, reflecting RBI’s cautious approach toward precious metal imports.
Merchanting Trade and Project Exports
The 2026 framework lays down clear rules for Merchanting Trade Transactions (MTT), including a maximum six-month period between outward and inward remittances. Documentation and close monitoring by banks are mandatory.
For project exports, exporters are allowed to temporarily deploy surplus funds generated abroad into short-term instruments, subject to Authorised Dealer supervision. This provides better cash-flow management for large international projects.
Reporting and Internal Controls
Robust reporting is a cornerstone of the new regulations. All export, import, and merchanting trade transactions must be accurately reported in EDPMS, IDPMS, and FETERS within prescribed timelines.
Additionally, Authorised Dealers are required to establish comprehensive internal policies and Standard Operating Procedures (SOPs) covering documentation, approvals, timelines, grievance redressal, and disclosure on their websites. This ensures consistency, transparency, and accountability across the banking system.
Conclusion
The FEMA Export and Import Regulations, 2026 represent a forward-looking step by the RBI to modernise India’s foreign exchange management framework. By simplifying procedures, strengthening digital monitoring, and providing flexibility where genuinely required, the regulations strike a balance between ease of doing business and regulatory discipline. For exporters, importers, and financial institutions alike, understanding and aligning with these regulations will be crucial for smooth and compliant international trade operations in the years ahead.
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