Notification No. FEMA XX/2025-RB April XX, 2025 Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2025 In exercise of the powers conferred by Section 7, Section 8, sub-section (6) of Section 10 and sub-section (2) of Section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999) and in supersession of the Foreign Exchange Management (Export of Goods & Services) Regulations 2015 (Notification No. FEMA 23(R)/2015-RB dated January 12, 2016), except in respect of things done or omitted to be done before such supersession, Reserve Bank of India makes the following Regulations, namely: 1. Short title and commencement: (1) These Regulations may be called the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2025. (2) They shall come into force on the first day after nine months from the date of issuance and shall apply to export and import transactions initiated from that date. 2. Definitions: (1) In these Regulations, unless the context requires otherwise, - (i) 'Act' means the Foreign Exchange Management Act, 1999 (42 of 1999); (ii) 'Authorised Dealer' means a person authorised as an authorised dealer under sub- section (1) of Section 10 of the Act, and includes a person carrying on business as a factor and authorised as such under the said Section 10; (iii) ‘Export of services’ means rendering of services overseas by a person resident in India, from India and shall also include export of software; (iv) ‘Export Declaration Form’ (EDF) means a form, wherein an exporter, inter alia, declares the full export value (Annex-I); (v) ‘Import of services’ means availing of services by a person resident in India from a person resident outside India, from overseas, and shall also include import of software; (vi) ‘Project Export’ shall have the same meaning as defined in the Foreign Trade Policy; (vii) 'Specified authority' means: -
Commissioner of Customs in Domestic Tariff Area (DTA) and Development Commissioner of Special Economic Zone (SEZ) in SEZ, for goods; and -
An Authorised Dealer in DTA and Development Commissioner of Special Economic Zone (SEZ) in SEZ, for services, including software. (2) The words and expressions used but not defined in these Regulations shall have the same meanings as assigned to them in the Act. 3. Declaration of exports and handling of documents (including direct dispatch): (1) An exporter shall furnish to the specified authority, a declaration in the Export Declaration Form (EDF) specifying the amount representing the full export value of goods or services. (2) An exporter of services who provides similar services to more than one recipient in a month, may submit a single EDF for all such exports with value upto ₹one lakh (or its equivalent in foreign currency) per invoice. In such cases, details of multiple recipients of services and invoices generated for such services shall be submitted as Annex to the EDF (Annex-IA). (3) An exporter shall submit to an Authorised Dealer, documents evidencing export within twenty-one calendar days from the date of shipment in case of goods and from the date of invoice in case of services:
Provided that the Authorised Dealer may, on a request from the exporter citing reasons for delay, accept the documents after the expiry of the above period after satisfying itself about the genuineness of the reasons cited. (4) An Authorised Dealer shall verify that an EDF is submitted by an exporter for all exports and the amount realised is as declared in the EDF. (5) An exporter shall route documents pertaining to export, to the overseas importer or any other entity through an Authorised Dealer:
Provided that the Authorised Dealer, through whom the export proceeds were realised may, on a request from the exporter for direct dispatch of documents, permit the same, if the Authorised Dealer is satisfied of the reasons cited. 4. Manner of Receipt and Payment for export and import of goods and services: (1) The payments received for export of goods and services and payments made for the import of goods and services shall be in the manner specified in the Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2023, as amended from time to time. (2) An exporter or importer shall provide the documents evidencing the export or import to the Authorised Dealer, to establish the genuineness of the transaction. (3) An Authorised Dealer shall make a credit or debit to the account of an exporter or an importer, for receipt of export or payment for import, only after having satisfied itself of the genuineness of the transaction, and shall, simultaneously close or update the respective entry in Export Data Processing and Monitoring System or Import Data Processing and Monitoring System (EDPMS or IDPMS)1. 5. Period within which full export value to be realised: (1) The amount representing the full export value of goods and services shall be realised (including by way of set off in terms of Regulation 7 of these Regulations) and repatriated by the exporter within the period specified below: -
nine months from the date of shipment in case of goods (other than goods exported to a warehouse outside India) and from the date of invoice in case of services; -
nine months from the date of sale of goods in case of goods exported to a warehouse outside India; -
as per payment terms of the contract, in case of project exports:
Provided that the Authorised Dealer may, on request by an exporter citing reasons for the delay, allow extension of time for realisation of export proceeds beyond the specified period, if the Authorised Dealer is satisfied of the reasons cited. (2) An Authorised Dealer shall put in place systems and processes to monitor and follow up with an exporter to realise export proceeds within the period specified above. 6. Reduction in the export realization: An Authorised Dealer who has handled the relevant export documents may, on request from the exporter citing reasons for under-realisation or non-realisation of full export value, allow reduction in realisation of export value, provided the Authorised Dealer is satisfied of the reasons cited. 7. Set off of export receivables against import payables: 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. 8. Third party receipts and payments: (1) An Authorised Dealer may allow realisation of export proceeds, from a third party as duly declared by the exporter in the EDF: Provided that an Authorised Dealer who has handled the export documents may, on request from the exporter citing reasons for receiving payment from any party, allow such receipt if the Authorised Dealer is satisfied of the reasons cited. (2) An Authorised Dealer may make payment to a third party for imports, wherein the name of the third party has been mentioned in the Invoice or in the Bill of Entry: Provided that an Authorised Dealer who has handled the import documents may, on request from the importer citing reasons for making payment to any other party, allow such payment if the Authorised Dealer is satisfied of the reasons cited. 9. Time period for making import payment: An Authorised Dealer shall monitor and follow up with an importer for completion of payment for imports within the period specified in the contract between the importer and overseas seller: Provided that the Authorised Dealer may, on request from the importer citing reasons for the delay, allow extension of time for making payment, beyond the period specified in the contract, if the Authorised Dealer is satisfied of the reasons cited. 10. Advance payment for exports and imports and delayed payment for imports: (1) An exporter shall, in case of advance receipt for export, route the advance amount, realisation of export proceeds, if any, and documents pertaining to the export, through the same Authorised Dealer. (2) In case of advance payment for imports, an importer shall route the advance payment, its subsequent payments, if any, and documents pertaining to such import, through the same Authorised Dealer. (3) An Authorised Dealer may permit advance remittance for import after having been satisfied of the genuineness of the requirement for advance remittance. The Authorised Dealer may consider specifying thresholds beyond which advance payment may require a standby Letter of Credit or a guarantee. (4) An exporter, or an importer, as the case may be, shall ensure that interest payable, if any, on advance payment received for export, or on delayed payment for imports, shall not exceed the all-in-cost ceiling of trade credit in terms of the Foreign Exchange Management (Borrowing and Lending) Regulations, 2018, as amended from time to time. 11. Import not materialised: (1) Where an importer is unable to import within the contract period, advance payment made by the importer, if any, shall be repatriated. (2) If the advance is not repatriated by the importer and the cumulative outstanding import advance exceeds ₹25 crores (or its equivalent in foreign currency), any future advance payment for imports by the importer shall require an unconditional, irrevocable standby Letter of Credit or a guarantee from an international bank of repute situated outside India or a guarantee of an Authorised Dealer in India, which is issued against a counter-guarantee of an international bank of repute situated outside India. 12. Unrealised exports: If the export proceeds of an exporter remain unrealised for a period beyond two years from the due date of realisation (including extended period permitted by an Authorised Dealer, if any) and the cumulative unrealised export proceeds of that exporter exceeds ₹25 crore (or its equivalent in foreign currency), the exporter shall undertake further exports only against receipt of full advance or an irrevocable Letter of Credit. 13. Reporting: (1) EDPMS (Export Data Processing and Monitoring System) and IDPMS (Import Data Processing and Monitoring System) - An Authorised Dealer: (i) shall enter details of export of service, of its customers, in EDPMS within one working day of receipt of EDF from an exporter. (ii) shall enter details of export (of its customers) as received from Non- EDI (Electronic Data Interchange) port in EDPMS within one working day of receipt of EDF. (iii) shall enter details of import (of its customers) as received from Non- EDI port in IDPMS within one working day of receipt of documents. (iv) shall enter details of import of service, in IDPMS, as declared and submitted by the importer, within one working day of receipt of documents. (v) shall enter details of inward and outward remittances for all exports, imports and Merchanting Trade Transactions (MTT) in EDPMS and IDPMS respectively. (vi) shall monitor all transactions in EDPMS and IDPMS for closure of outstanding entries. (vii) may on request by an exporter citing reasons, close the entry relating to export advance transactions in EDPMS, where no export has been made and where refund of such advance is not possible, after having been satisfied of the genuineness of the reasons cited. (viii) may on request by an importer citing reasons, close the entry relating to import advance transactions in IDPMS, where no import has taken place and where repatriation of such advance is not possible, after having been satisfied of the genuineness of the reasons cited. (ix) shall, inter alia, follow up with an exporter and an importer for: -
submission of the relevant documentary evidence pertaining to export and import transactions; -
realisation and repatriation of export proceeds. (2) An Authorised Dealer shall report all foreign trade transactions in Foreign Exchange Transaction Electronic Reporting System (FETERS) in terms of extant guidelines issued by the Reserve Bank from time to time. 14. Export of goods and services against repayment of state credits: For the implementation of the provisions of the Inter banking arrangement, an Authorised Dealer may adhere to instructions and directions issued by the Reserve Bank from time to time on export of goods and services against repayment of state credits granted by the erstwhile Soviet Union. 15. Import of gold and silver: Save as otherwise provided in the Act, Rules, Regulations or Directions made there under, no advance remittance for the import of gold and silver shall be permitted by an Authorised Dealer. 16. Project Export: (1) An Authorised Dealer shall facilitate payments for project exports as per the underlying contract. (2) Subject to monitoring by an Authorised Dealer, a project exporter may deploy temporary cash surpluses, generated outside India, from such exports, for investments in short-term instruments (with original or residual maturity of one year or less) including in treasury bills and in deposits with banks outside India. 17. Merchanting Trade Transaction (MTT): (1) A person undertaking Merchanting Trade, in accordance with the Foreign Trade Policy, shall ensure that: (i) payments for both the legs (outward and inward remittances) are routed through the same Authorised Dealer; (ii) the period between the outward remittance and inward remittance does not exceed six months: Provided that the Authorised Dealer may, on request citing reasons for delay, allow extension of time, if the Authorised Dealer is satisfied of the reasons cited. (iii) outward remittances are sent only to the overseas seller and inward remittances are received only from the overseas buyer. (iv) the documents evidencing the MTT are provided to the Authorized Dealer, to establish the genuineness of the transactions. (2) An Authorised Dealer shall credit or debit the account of its customer for any cross-border transaction related to MTT after having been satisfied with the genuineness of the same and shall, simultaneously close or update the respective entry in EDPMS and IDPMS. 18. International Trade Invoicing and Settlement in Indian Rupees (INR): An Authorised Dealer shall encourage invoicing and settlement of cross border trade transactions in INR. The Authorised Dealer may be guided by the extant guidelines on the broad framework as well as instructions issued by the Reserve Bank in this regard, from time to time. 19. Payment transactions for export and import of goods and services in online mode: An Authorised Dealer may be guided by the directions on Regulation of Payment Aggregator – Cross Border (PA - Cross Border), issued by the Reserve Bank, as amended from time to time. 20. Internal Policy for handling transactions: (1) An Authorised Dealer shall put in place a separate, comprehensive, well-documented internal policy, within six months of issuance of these regulations, for handling transactions (including the reporting thereof) related to export and import of goods and services as well as MTT. The policy should at least include the following: -
List of processes and approvals that will be handled by the AD. -
List of documents required for each process and approval. -
Timeline for each process and approval. -
Charges for services rendered. -
Extension of the time-period for realisation and repatriation of export proceeds. -
Extension of the time-period for import payments. -
Third party payments in export and import transactions. -
Reduction in the amount of export proceeds to be realised and repatriated. -
Set-off of export receivables against import payables. -
Advance receipts for exports and advance payments for imports. -
Handling of documents (including Direct dispatch of documents by an exporter). -
Monitoring of project exports. -
Merchanting Trade transactions. -
Delegation of powers for internal approvals for each process. -
Closure of outstanding entries in EDPMS and IDPMS. (2) While laying down internal policy and processes, an Authorised Dealer shall ensure that the responsibility for approving transactions is clearly delegated across internal levels. The policy shall also have an escalation process for handling customer grievances and an appeal mechanism wherein the appeal is handled at a higher internal level. The higher internal level should take a final decision based on the genuineness of the submissions made by the customer. (3) An Authorised Dealer shall ensure that the charges levied for handling transactions are reasonable and proportional to the services rendered. An Authorised Dealer shall not levy any charges or penalty on its constituent (exporter or importer or merchant trader) for any regulatory delay/violation by the constituent. (4) The policy shall be disclosed on the website of the Authorised Dealer. ( )
Chief General Manager
|