On July 2, 2024, the Reserve Bank of India (RBI) proposed a set of streamlined regulations governing the export and import of goods and services, with the objective of enhancing the ease of doing business—particularly for small exporters and importers—and enabling authorised banks to provide more efficient foreign exchange services.
These proposals were introduced as part of the RBI’s Statement on Developmental and Regulatory Policies issued in June 2024. The draft regulations are intended to replace the Foreign Exchange Management (Export of Goods & Services) Regulations, 2015 [Notification No. FEMA 23(R)/2015-RB dated January 12, 2016], without affecting actions taken or omitted under the previous framework.
Key Provisions of the Draft Regulations
1. Export Declaration and Realisation of Export Proceeds
Under the proposed regulations, every exporter is required to submit an export declaration form to the designated authority. This form must include:
- Type of export (goods, services, software)
- Shipping bill number and date
- Date of invoice for services or software
- Mode of transport and realisation
- Exporter and consignee details
- Exporter category
- Customs security number
- Total FOB/services/software value (in words)
The full value of the exported goods or services must be realised and repatriated to India:
- Within nine months from the date of shipment (for goods)
- Within nine months from the date of invoice (for services)
Export documents are to be submitted to the Authorised Dealer (AD) bank within 21 calendar days from the date of shipment (for goods) or date of invoice (for services). However, AD banks may accept documents beyond this period, subject to RBI directions.
AD banks may also extend the period for realisation and repatriation of export proceeds if the exporter shows a justifiable cause. Further, a reduction in the full export value may be permitted in accordance with RBI guidelines.
2. Advance Payment for Exports and Imports
- Advance payments for exports can be received in accordance with the underlying export contract.
- Interest payable on such advances must not exceed the all-in-cost ceiling applicable to trade credit as per the Foreign Exchange Management (Borrowing and Lending) Regulations, 2018, as amended.
- If an exporter fails to fulfill the export obligation within the contract period, the advance must be refunded unless an extension has been granted by the AD.
- In case of non-import within the contract or extended period, any advance payment made for imports must be repatriated and surrendered to the AD.
Unfulfilled advance transactions—where no import/export occurs even after permitted extensions and the advance is not refunded—shall be subject to Regulation 3 of the Foreign Exchange Management (Borrowing and Lending) Regulations, 2018, as amended.
3. Project Exports
For exports involving deferred payment terms, turnkey projects, or civil construction contracts, exporters must obtain prior approval from the AD bank before entering into such arrangements. The AD bank shall evaluate the proposal in line with applicable FEMA rules and directions.
4. Caution-Listing of Exporters
An exporter who fails to realise export proceeds within the prescribed or extended period under Regulation 5 may be caution-listed by the AD bank, in accordance with RBI directions. However, the exporter must be given a reasonable opportunity to be heard before such listing.
Once caution-listed, the exporter may undertake further exports only against:
- Advance payment in full, or
- An irrevocable letter of credit, to the satisfaction of the AD bank.
The AD may remove the caution listing upon compliance, as per RBI instructions.
5. Import of Gold and Silver
The draft regulations explicitly state that no advance remittance for the import of gold or silver shall be permitted unless specifically approved by the Reserve Bank of India.
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