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Informist, Friday, Jan. 16, 2026

 

--RBI notifies norms to improve ease of doing business under FX mgmt act

--RBI: New FX mgmt norms for export, import to take effect Oct 1

 

NEW DELHI – The Reserve Bank of India Friday notified directions on the export and import of goods and services under the Foreign Exchange Management Act, 1999. The new norms are effective Oct. 1, the regulator said.

 

The regulations are primarily principle based and intended to promote ease of doing business, especially for small exporters and importers, the RBI said in a release. "They are also intended to empower Authorised Dealers to provide quicker and more efficient service to their customers."

 

The RBI had initially floated draft regulations in July 2024 and revised them to seek public feedback in April. It directed authorised dealers to ensure adherence to the Foreign Exchange Management Act and the government's foreign trade policy through the regulator's digital portal, while informing the Directorate of Enforcement of any doubtful transactions. The new guidelines suspend or supersede 167 prior RBI circulars and two RBI master directions, on the export and import of goods and services.

 

Goods exporters must declare the full export value to specific authoritiies at the time of export. A traveller moving personal effects will not be treated as an exporter. Exporters of services must specify the full export value of services within 30 days from the month for which the services were invoiced. Services exports to multiple recipients in a month can submit a single form, and those not exporting software can submit their form on or before the date of payment receipt. The authorised dealer bank may allow a delay in the declaration if it is satified with the exporters reasoning, the RBI said.

 

"In the case of a non-EDI (Electronic Data Interchange) port for export of goods; or where the specified authority for export of services is other than an Authorised Dealer, the duly authenticated EDF (export declaration form), shall be forwarded by the specified authority to the respective Authorised Dealer," the regulator said.

 

The authorised dealer must satify itself that the import or export transaction is genuine and update the entry in the monitoring system for exports or imports. The manner of receipts and payments shall be the same as extant directions issued in 2023, the RBI said.

 

The value of goods and services exported must be realised within 15 months from the date of shipment or invoice. The same timeline applies to the export of goods to foreign warehouses, calculated from the date of sale. The timeline of all these segments increases to 18 months if the invoice is in the Indian rupee, the regulator said. Project exports should be realised as per the payment terms of the contract.

 

 

Authorised dealers may allow a delay if requested by importers or exporters after the constituents provide reasonable cause. The dealers must put in place systems to ensure the timelines are met for both importers, as mentioned in their contracts, and exporters. An under-realisation or non-realisation of the full export value can also be allowed by the authorised dealer, based on a request from the exporter. Exports of up to INR 1 million may be reduced in export value based on only the exporters declaration, the RBI said.

 

"An Authorised Dealer may allow set-off of export receivables against import payables from/to the same overseas buyer or supplier or with their overseas group or associate companies, within the stipulated period for realisation of export proceeds or extended period, if any, allowed by the Authorised Dealer," the directions said. 

 

The authorised dealer can allow third parties to make receipts and payments on behalf of an importer or exporter. No advance remittance shall be paid for the import of gold and silver, the RBI said.

 

Importers and exporters shall use the same authorised dealer for the realisation of the full transaction if they transact an advance amount, in the case of exporters, or advance payment, in the case of importers, with an authorised dealer, the RBI said. The full transaction may be routed through another authorised dealer only after both the old and new dealers are notified.

 

Authorised dealers can permit advance remittance for imports after checking that the order is genuine and the advance is necessary. An advance payment may only be up to a threshold if the dealer sets a cap, after which further payment is only allowed by a standby letter of credit or guarantee. The interest payable on any advance payment received for export or on a delayed payment for imports cannot cross the all-in-cost ceiling of trade credit, the regulator said.

 

All authorised dealers must have an internal policy and standard operating procedures for handling import and export transactions. Its website must have the policy and the main features of the procedures. The authorised dealer cannot levy a charge or penalty for any regulatory delay or violation from a constituent. It must also make sure its charges are reasonable and proportional to services rendered, the RBI said. 

 

If an import is not materialised within the contract period or the advance periods, the importer must repatriate the advance payment made. If the advance is not repatriated then future advance payments shall need an unconditional, irrevocable standy letter of credit or equivalent from an international bank of repute. If export proceeds are unrealised after a year of the due date of realisation, the exporter cannot export further without an irrevocable letter of credit.

 

Project exports may deploy temporary cash surpluses generated outside India in instruments maturing in one year or less outside India, subject to monitoring by an authorised dealer. People undertaking merchant trade transactions must ensure that the period of outward remittance and inward remittance, or vice versa, does not exceed six months. International trade invoicing and settlement in rupees shall follow extant guidelines laid out by the RBI, the regulations said.  End

 

Reported by Aaryan Khanna 

Edited by Akul Nishant Akhoury

 

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