Draft - Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2024

Notification No. FEMA XX/2024-RB

July XX, 2024

Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2024

In exercise of the powers conferred by Section 7, Section 8, Section 10(6) 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 as respects things done or omitted to be done before such supersession, Reserve Bank of India makes the following Regulations, namely:

1. Short title and commencement:

(i) These Regulations may be called the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2024.

(ii) They shall come into force from the date of their publication in the Official Gazette.

2. Definitions:

In these Regulations, unless the context requires otherwise, -

1. 'Act' means the Foreign Exchange Management Act, 1999 (42 of 1999);

2. '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;

3. ‘Form’ means Export Declaration Form annexed to these Regulations, wherein the exporter, inter alia, declares the full export value;

4. 'Specified authority' means the person or the authority to whom the Form is to be submitted, as mentioned in the form;

5. the words and expressions used but not defined in these Regulations shall have the same meaning respectively assigned to them in the Act.

3. Declaration of exports:

1. Every exporter shall furnish to the specified authority, a declaration in the Form annexed to these Regulations, specifying the amount representing the full export value of the goods or services.

2. The exporter shall submit to the Authorised Dealer the documents pertaining to export, within twenty-one calendar days from the date of shipment in case of goods or from the date of invoice in case of services;

Provided that the Authorized Dealer may accept the documents after the expiry of the above period subject to directions issued by Reserve Bank

4. Manner of Receipt of payment for export of goods and services:

Unless otherwise authorized by the Reserve Bank, the receipt of payments for export 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.

5. Period within which full export value to be realized:

The amount representing the full export value of goods and services shall be realised and repatriated to India within nine months from the date of shipment for goods and date of invoice for services.

Provided further that Authorised Dealer may, for reasonable and sufficient cause shown by the exporter, and on being satisfied that such cause is justifiable, extend the specified period.

Provided that the Authorised Dealer may permit reduction in the full export value, as per the directions issued by Reserve Bank.

6. Advance payment:

1. Advance payment for export of goods and services may be received as per the export contract.

2. Interest payable if any, on such advance payment shall not exceed all-in-cost ceiling of trade credit in terms of Foreign Exchange Management (Borrowing and Lending) Regulations, 2018 as amended from time to time.

3. Where an exporter is unable to fulfill the export obligation within the contracted period, the advance received shall be refunded unless extension of time to fulfill the export obligation has been granted by the Authorised Dealer.

4. Advance payment for import of goods and services shall be repatriated by the importer and surrendered to the Authorised Dealer in case of non-import within the contract period or within the extended period granted by the Authorised Dealer.

5. Advance payment made or received for import or export of goods and services which do not result in any import or export even within the extended time granted by the Authorised Dealer and when the advance is not refunded thereafter would be subject to the Regulations 3 of the Foreign Exchange Management (Borrowing and Lending) Regulations, 2018 as amended from time to time.

7. Project exports:

For export of goods or services on deferred payment terms or in execution of a turnkey project or a civil construction contract, the exporter shall, before entering into any such export arrangement, submit the proposal for prior approval of the Authorised Dealer, which shall consider the proposal in accordance with the rules/regulations/directions under FEMA.

8. Caution-listing of exporters:

1. An exporter who has not realized the full value of export within the time specified (including extensions, if any) under Regulation 5 may be caution listed by the Authorised Dealer subject to the directions issued by the Reserve Bank;

   Provided that the exporter has been given a reasonable opportunity of being heard by the Authorised Dealer, before such caution-listing.

2. The Authorised Dealer may remove the name of the exporter from the caution-list, as per the directions issued by Reserve Bank.

3. An exporter who has been caution listed shall undertake export only against receipt of advance payment in full or against an irrecoverable letter of credit, to the satisfaction of the Authorised Dealer.

(N Senthil Kumar)
General Manager