India’s New Fema Export and Import Regulations: What Businesses Need to Know

The Reserve Bank of India (“RBI”) has notified the Foreign Exchange Management (Export of Goods and Services) Regulations, 2026 vide Notification No. FEMA 23(R)/2026-RB dated January 13, 2026 (“2026 Regulation”). The Regulations will come into force on October 1, 2026 and will supersede the FEMA (Export of Goods and Services) Regulations, 2015.

The 2026 Regulations seek to consolidate and streamline the regulatory framework governing the export and import of goods, services and software. They reflect an effort to update existing foreign exchange controls in line with current trade practices, while reducing procedural complexity and overlap across multiple compliance requirements.

A notable feature of the revised framework is the enhanced role of authorised dealer banks, who are entrusted with greater responsibility in overseeing transactions and facilitating regulatory compliance. Overall, the 2026 Regulations are intended to bring greater clarity and consistency to export-import related foreign exchange compliance, while supporting the broader objective of improving the ease of doing business for Indian entities engaged in cross-border trade.

Implementation Timeline

The Foreign Exchange Management (Export of Goods and Services) Regulations, 2026 will come into force on October 1, 2026.

From the effective date, the 2026 Regulations will supersede the existing foreign exchange framework governing export and import transactions, including the FEMA (Export of Goods and Services) Regulations, 2015, the Master Direction on Export of Goods and Services, the Master Direction on Import of Goods and Services, and the 167 circulars specified in the annexure to the new directions (collectively, the “Existing Provisions”).

The staggered implementation provides regulated entities and authorised dealer banks with a transition period to align systems, documentation and compliance processes with the consolidated framework. Until 30 September 2026, the Existing Provisions will continue to apply.

What Has Changed Under The 2026 Regulations

The 2026 Regulations introduce a more consolidated and flexible framework for export and import transactions. The key changes are set out below:

1. Single export declaration for goods and services

Exports of goods, services and software are now covered under a single Export Declaration Form (EDF). For goods, the EDF is filed along with the shipping bill at the time of export. For services, exporters may file one consolidated EDF for all service exports in a month, within 30 days from the end of that month. Service exporters, including SaaS and tech startups, benefit from reduced paperwork and simplified monthly reporting.

2. Uniform timelines for realisation of export proceeds

Export proceeds for both goods and services must be realised and repatriated within 15 months from the date of shipment (for goods) or invoice (for services). Where exports are realised in Indian Rupees, the timeline is extended to 18 months. Such longer and clearer timelines provides a breathing room for staggered payments and long-term overseas contracts.

3. Flexibility in cases of reduced or unrealised export value

Authorised dealer (“AD”) banks may permit reduction or non-realisation of export value upon satisfactory justification. For exports below INR 10 lakh, a simple declaration from the exporter is sufficient.

4. Set-off of export receivables and import payables

Set-off is now permitted between export receivables and import payables with the same overseas counterparty or its group or associate entities, within prescribed timelines.

5. Permitted third-party payments

Third-party payments in export and import transactions are allowed, subject to submission of bona fide documentation such as tripartite agreements, invoices and evidence of the underlying relationship. The 2026 regulations recognise flexibility in commercial structures, particularly for group companies and platform-based models.

6. Import payment timelines aligned with contracts

Import payments may be made within the timelines agreed under the commercial contract, with extensions permitted upon approval of the AD bank. This preserves contractual freedom while reducing regulatory friction in vendor negotiations.

7. Liberalised advance payment framework for imports

Advance remittances for imports are permitted subject to the AD bank’s permission and such thresholds as may be prescribed by the AD banks. Advance remittance for import of gold or silver remains prohibited.

8. Simplified merchanting trade transactions[1]

The 2026 Regulations introduce a simplified and standalone framework for merchanting trade transactions, with defined timelines for completion and greater reliance on authorised dealer banks for approvals and monitoring.

9. Unified incident reporting framework

All incidents relating to export and import transactions are to be reported through a common reporting mechanism using the FETERS and EDPMS portals.

What This Means For Businesses

The 2026 Regulations are expected to ease compliance for businesses engaged in cross-border trade by introducing unified reporting, clearer timelines and greater procedural flexibility. For startups and service-led businesses, simplified export declarations and extended realisation periods reduce administrative burden and provide greater certainty in managing overseas receivables. The permissibility of set-offs, third-party payments and advance remittances, subject to bank oversight, allows businesses to structure transactions in line with commercial realities while maintaining regulatory compliance.

Conclusion

The 2026 Regulations mark a significant step towards simplifying India’s export-import framework in line with the objective of ease of doing business. By consolidating multiple rules and circulars, enhancing contractual flexibility and delegating greater authority to authorised dealer banks, the RBI has created a more predictable and efficient compliance regime. Clearer timelines and streamlined approvals are expected to facilitate smoother cross-border trade and, over time, support increased foreign investment and business growth.

[1] Merchanting trade involves the purchase of goods from one foreign supplier and their sale to another foreign buyer without the goods physically entering India.