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Dated: 29.01.2026
Reserve Bank of India Introduces FEMA 2026 Regulations for Streamlined Export and Import Operations
The Reserve Bank of India (RBI) has introduced the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, which will come into effect on October 1, 2026. These regulations aim to streamline the processes related to the export and import of goods and services under the Foreign Exchange Management Act (FEMA), 1999. β The new regulations are designed to promote ease of doing business, especially for small exporters and importers, while empowering Authorised Dealers (ADs) to provide efficient services to their customers. β
Key Highlights of the Regulations
1. Simplification and Ease of Doing Business β
The new regulations aim to simplify the export and import processes, making them more efficient and transparent. β This is particularly beneficial for small exporters and importers, as it reduces the compliance burden and enhances operational efficiency. β
2. Effective Date
The regulations will be effective from October 1, 2026, and will supersede the existing Master Direction β Export of Goods and Services and Master Direction β Import of Goods and Services, along with several circulars listed in the annexure. β
3. Key Responsibilities of Authorised Dealers
- Monitoring Transactions: ADs are required to ensure compliance with FEMA, 1999, and the Foreign Trade Policy while handling export and import transactions. β
- Reporting: ADs must report all foreign trade transactions in the Foreign Exchange Transaction Electronic Reporting System (FETERS) and update entries in the Export Data Processing and Monitoring System (EDPMS) and Import Data Processing and Monitoring System (IDPMS). β
- Handling Doubtful Transactions: Any suspicious transactions must be reported to the Directorate of Enforcement (DoE). β
4. Export Declaration Form (EDF) β
Exporters are required to submit an Export Declaration Form (EDF) to the specified authority, detailing the full export value of goods or services. β The EDF submission process varies depending on whether the export is through an Electronic Data Interchange (EDI) port or a non-EDI port. β
5. Time Period for Realisation of Exports β
Exporters must realise and repatriate the full export value within 15 months from the date of shipment for goods or the date of invoice for services. β For exports invoiced or settled in Indian Rupees, the period is extended to 18 months. β
6. Set-Off and Third-Party Transactions
The regulations allow set-off of export receivables against import payables and third-party receipts and payments for export and import transactions, provided the AD is satisfied with the genuineness of the transactions. β
7. Advance Payments and Delayed Payments β
- Exporters and importers can route advance payments through their ADs, with provisions for interest rates and thresholds for advance payments. β
- Delayed payments for imports or exports may be allowed by ADs if valid reasons are provided. β
8. Merchanting Trade Transactions (MTT) β
The regulations provide guidelines for MTT, including the time frame for completing transactions and the requirement for documentation to establish the genuineness of the trade. β
9. Internal Policy and SOP β
ADs are required to establish a comprehensive internal policy and Standard Operating Procedure (SOP) for handling export and import transactions. β This includes timelines, charges, escalation processes, and customer grievance mechanisms. β
10. Superseded Circulars
The regulations supersede a long list of circulars related to the export and import of goods and services, as detailed in the annexure. β
Comparative Table: FEMA Regulations 2015 vs. FEMA Regulations 2026
| Aspect | FEMA Regulations, 2015 | FEMA Regulations, 2026 |
| Effective Date | January 12, 2016 β | October 1, 2026 β |
| Objective | Regulate export and import transactions under FEMA, 1999 β | Promote ease of doing business and empower Authorised Dealers for efficient services β |
| Export Declaration Form (EDF) β | Required for goods and software exports; submitted to Customs or STPI β | Required for goods and services; submission process streamlined for EDI and non-EDI ports β |
| Time Period for Realisation β | 15 months for goods and services; 18 months for INR invoiced transactions β | Same as 2015 regulations β |
| Set-Off of Receivables β | Allowed under specific conditions β | Allowed for same overseas buyer/supplier or group companies β |
| Third-Party Transactions | Permitted under certain conditions β | Permitted with ADβs satisfaction of transaction genuineness β |
| Advance Payments | Advance payments allowed with interest capped at LIBOR + 100 basis points β | Advance payments allowed with interest capped at trade credit ceiling β |
| Merchanting Trade Transactions β | Guidelines for MTT provided β | Time frame for MTT completion set at 6 months; ADs can allow extensions |
| Reporting | EDPMS and IDPMS introduced | Enhanced reporting requirements in EDPMS, IDPMS, and FETERS |
| Superseded Circulars | Superseded FEMA 23/2000-RB and related amendments | Supersedes FEMA 23(R)/2015-RB and 95 export/import circulars |
| Internal Policy and SOP β | Not explicitly required β | Mandatory for ADs to establish internal policy and SOP β |
Conclusion
The Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 mark a significant step towards simplifying and modernising the export and import processes in India. β By empowering Authorised Dealers and introducing streamlined procedures, the RBI aims to enhance the ease of doing business and support small exporters and importers. β These regulations also ensure compliance with FEMA, 1999, and the Foreign Trade Policy, while providing flexibility for genuine cases of delays or adjustments in transactions.
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Source: RBI
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