The Reserve Bank of India has notified the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, bringing export and import of goods and services under one consolidated FEMA regulation. The Regulations come into force from 01 October 2026 and are issued in supersession of the FEMA Export of Goods and Services Regulations, 2015
The 2026 Regulations significantly strengthen the legal spine by codifying key compliance themes that were previously addressed largely through directions and system based processes. The regulation formalises a principle based framework where Authorised Dealers monitor, satisfy themselves on genuineness, and close trade entries in the RBI systems in a controlled manner.
Following are the changes highlights of the changes proposed in the New Regulations which shall come into effect from 1st October 2026.
| Topic | Erstwhile position (what applied till now) | New position under FEMA Export and Import Regulations 2026 from 1st October 2026 | Practical impact for exporters, importers, AD banks |
|---|---|---|---|
| Legal structure | Export was governed by FEMA Export Regulations 2015 plus RBI Master Direction on Export. Import was governed through Regulations, RBI Master Direction on Import and the current account rules framework. | A single consolidated FEMA regulation now covers export and import of goods and services. It supersedes FEMA Export Regulations 2015. | One consolidated rulebook reduces fragmentation. Expect Master Directions to be aligned to the new Regulations as the operational layer. |
| Coverage of Export of Services | Export of services often did not require a declaration form in cases other than Software, and were subject to realisation obligation. | The new regulation formalises the Service Exports with mandatory filing of Export Declaration Form (EDF), with a defined filing timeline and the ability to file a consolidated monthly EDF. | Service exporters need an EDF discipline and documentation trail similar to goods, with monthly cadence. |
| EDF timeline for services | No single uniform EDF timeline across all service exports, and services could be exported without furnishing any declaration form. | EDF for services within 30 days from end of the month in which the invoice is raised, with relaxations such as filing on or before receipt of payment for non-software services and extension for delay. | Builds compliance certainty. Service Exporters should align invoicing and receivables systems with monthly EDF filing. |
| Export declaration for goods | EDF linked to shipping bill and EDPMS processes, with timelines like submission of duplicate EDF within 21 days in certain cases. | Exporter of goods must furnish EDF at the time of export, and EDF is deemed submitted as part of shipping bill for EDI ports. | Largely a codification, but now embedded in a FEMA Regulation, which is legally stronger than directions. |
| Realisation timeline for export proceeds | RBI Master Direction presently states 15 months from date of export for all exporters. | 15 months from shipment for goods, from invoice date for services; warehouse exports 15 months from date of sale of goods from warehouse; project exports as per contract | Mostly aligns to current reality, but now codified in Regulations and explicitly covers services and warehouse exports. |
| INR invoicing and settlement | INR settlement framework existed via RBI guidelines and circulars. (Operationally scattered across directions.) | Where export is invoiced or settled in INR, realisation and repatriation period becomes 18 months. | Gives a longer runway for INR trade settlement, helpful for rupee invoicing adoption. |
| Extension of export realisation | AD banks could extend realisation period 6 months at a time, subject to conditions, including investigation checks and exporter track record. | AD may extend realisation beyond specified period if satisfied with reasons, and must put systems to monitor and follow up. | More principle based, with explicit expectation that ADs implement monitoring systems. Exporters should maintain documentary reasons for delays. |
| Reduction or under realisation of export value | Allowed under Master Direction with write off, self write off and AD write off rules, with threshold of 5%/10% above which RBI approval. | Obligation has been given to AD, wherein, in the event of under-realisation or non-realisation of the full export value, if AD Bank is satisfied with the reason cited for reduction or write-off, the transaction can be closed. | Small value write offs become easier. For larger values, maintain evidence of disputes, quality claims, insolvency, and recovery efforts. |
| Unrealised exports, restriction on further exports | Earlier, exporters could be caution listed and faced restrictions and closer scrutiny for persistent non realisation. | If export proceeds remain unrealised beyond one year from due date or extended period, further exports must be on full advance or irrevocable LC | A clear hard consequence. Exporters should monitor ageing and seek extensions well before due dates lapse. |
| Advance receipt of Exports, shipment timeline | Exporter had a specific shipment timeline from the date of advance receipt, currently within three years. | 2026 Regulations cover routing of advance and proceeds through the same AD and interest cap linkage, but do not prescribe a shipment deadline linked to advance receipt. | |
| Set off of export receivables against import payables | Permitted subject to conditions under the export Master Direction. | Expressly permitted for same overseas buyer or supplier or their group or associate companies, within stipulated or extended realisation period. | Better clarity for group entity netting. Document group relationship and ensure set off occurs within timelines. |
| Third party receipts and payments | Permitted under directions with AD due diligence and documentations | Permitted for export and import, subject to AD being satisfied on bonafides | AD Bank shall devise an SOP for the documentation required in case of Third party receipts or payment. |
| Import payment timeline | General rule: remittances against imports should be completed not later than 6 months from date of shipment, with and extensions clause. | Import payments to be made within the period specified in the underlying contract. AD can extend beyond contract period based on reasons. | Big shift. The rigid 6 month rule is replaced by contract driven timelines, but AD scrutiny increases. Importers should ensure contracts clearly state payment terms. |
| Advance remittance for imports | Detailed thresholds and guarantee or SBLC requirements, for example SBLC or bank guarantee for advance remittance above USD 200,000. | AD may permit advance remittance after verifying genuineness and may set its own thresholds beyond which SBLC or guarantee may be required. | Moves from RBI fixed thresholds to bank policy. Importers should ask their AD for the bank’s threshold policy in writing. |
| Interest on advance receipts and delayed import payments | Interest was governed by trade credit and other directions. | Interest on export advance or delayed import payment must not exceed the all in cost ceiling of trade credit under FEMA Borrowing and Lending Regulations 2018. | Contracts should include interest clauses consistent with trade credit ceiling to avoid FEMA breach. |
| Import of gold and silver, advance remittance | Import rules existed via directions and nominated bank routes. | No advance remittance permitted for import of gold or silver, save as otherwise provided under the broader framework. | Gold and silver importers must plan funding structures without advance remittance, unless another specific permission pathway applies. |
| Import not materialised | Direction based follow up for evidence of import and repatriation, with IDPMS tracking | If import cannot happen within contract or extended period, advance must be repatriated. If not repatriated or IDPMS not marked off, future advances require SBLC or guarantee | Strong deterrent against open advances. Importers should track contractual deadlines and ensure refund or import completion evidence is filed. |
| Merchanting Trade Transactions | Import Master Direction required overall completion within 9 months and no FX outlay beyond 6 months | The period between outward and inward remittance, or vice versa, must not exceed 6 months, with AD allowed extension. Documentation must evidence genuineness | Tighter emphasis on the 6 month remittance gap rather than overall 9 months framing. Merchant traders should recheck cycle time and keep documentation ready |
| Settlement in INR | Guided by extant INR settlement framework directions | Continues to be guided by extant INR trade settlement guidelines, expressly referenced in the Regulation. | No change in concept, but strengthens the legal hook for INR settlement related compliance. |
| Mandatory internal policy and SOP for ADs | ADs had internal processes, but not uniformly mandated in one place, and disclosure expectations varied | AD must put in place a separate, comprehensive internal policy and SOP for trade transactions, including documents, timelines, charges, extensions, adjustments, advances, delegation, factoring. Charges must be reasonable, and AD must disclose policy and SOP features on its website | Expect more standardisation and transparency. Importers and exporters should insist on the bank’s published SOP, timelines, and charges |
Closing perspective
The 2026 Regulations are best read as a compliance modernisation exercise: consolidated rules, simplified small value closures, explicit service export declarations, contract driven import payment discipline, and stronger governance expectations on banks through mandatory SOPs and transparency.
