India’s central bank has amended the export regulations under FEMA to give exporters more time to realise proceeds and fulfil shipment commitments amid global trade disruptions that have delayed payments and logistics, thereby easing short‑term cash‑flow pressures on firms engaged in goods, software, and services exports. The changes are designed to mitigate the impact of global headwinds on export realisation while aligning bank handling of export proceeds with extended operational realities faced by exporters.
What changed under FEMA (Second Amendment), 2025
- Realisation timeline extended to 15 months: Exporters may now realise and repatriate export proceeds within 15 months from the date of export, up from 9 months earlier, providing a longer runway to complete collections in slower demand cycles and disrupted corridors.
- Shipment time for advance receipts: Where advance payment has been received, the time allowed to ship goods is increased to up to 3 years from receipt of advance or as per contract, whichever is later, which reduces the need for frequent extensions and renegotiations with buyers amidst logistical bottlenecks.
- Objective: Cushion export cash flows and reduce procedural strain on exporters and banks managing export documentation during periods of delayed remittances and shipment rescheduling.
Compliance and bank processing
- Banks will continue to monitor overdue export bills, but the longer statutory window reduces exception handling and penalties where delays are attributable to macro disruptions rather than exporter delinquency.
- Exporters should update buyer contracts, LC terms, and inward remittance schedules to reflect the extended FEMA timelines and ensure documentary alignment for bank closure of export bills.
Practical implications for exporters
- Working capital relief: Additional time to collect receivables supports liquidity without immediate resort to expensive bridge financing or forced discounts for early payment.
- Contract flexibility: Longer shipment timelines for advances lower the risk of contract breach and allows orderly fulfilment in volatile freight and capacity conditions.
Action checklist
- Amend sales contracts and shipment schedules to leverage the extended timelines; communicate revised ETAs with buyers and logistics providers.
- Align export bill tracking systems with 15‑month realisation and 3‑year shipment windows for advance receipts; maintain evidence of disruptions to support bank reviews.
Key takeaway: The FEMA (Export of Goods and Services) (Second Amendment) Regulations, 2025, extend the statutory timelines for export proceeds and shipments, providing exporters crucial breathing space to manage receivables and delivery in a turbulent global environment.
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