India’s EXIM Framework: RBI Amends FEMA Regulations

India’s new EXIM framework, due to take effect on October 1, 2026, has been amended by the Reserve Bank of India (‘RBI’).

Notified on September 22, 2026, the Foreign Exchange Management (Export and Import of Goods and Services) (Amendment) Regulations, 2026 (‘Amendment Regulations’) revise realisation timelines for export proceeds, provide for the continuation of existing caution-listing status, and confer transitional authority on Authorised Dealer Banks (‘AD Banks’).

Background

Following a comprehensive review of the regulations and directions governing the export and import of goods and services under the Foreign Exchange Management Act, 1999 (‘FEMA’), and in consultation with stakeholders, RBI issued the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (‘EXIM Regulations’) on January 13, 2026, along with the Directions on Export and Import of Goods and Services (‘EXIM Directions’) on January 16, 2026.

Together, these supersede the Foreign Exchange Management (Export of Goods and Services) Regulations, 2015 (‘Export Regulations 2015’), the Master Direction – Export of Goods and Services, the Master Direction – Import of Goods and Services, and the 167 circulars listed in the Annex to the EXIM Directions.

The new framework is primarily principle-based. It is intended to promote ease of doing business, especially for small exporters and importers, and to empower AD Banks to provide more efficient service. It consolidates into a single document instructions previously issued separately to AD Banks, including processes for handling transactions related to export and import.

Since the new framework, along with the September 22 amendments, takes effect only from October 1, the extant 2015 framework continues to apply as of date.

Overview of the amendments

Key aspects of the Amendment Regulations are as follows:

1. Shortened timelines for realisation of export proceeds

• • Goods and services [Regulation 5(1)(a)]: The realisation period has been cut from fifteen months to nine months, running from the date of shipment for goods or the date of invoice for services.
  • Exports of goods to a warehouse outside India [Regulation 5(1)(b)]: The realisation period has been cut from fifteen months to nine months, running from the date of sale of the goods from the warehouse. While the general realisation period for goods and services under the extant 2015 framework already stands at nine months, the warehouse export window under that framework remains at fifteen months. The January 2026 Regulations had set both categories at fifteen months; this amendment brings them to nine.
  • Project exports [Regulation 5(1)(c)]: These are unaffected by the amendment. Realisation will be as per the payment terms specified in the contract.
  • Exports invoiced or settled in Indian Rupees [first proviso to Regulation 5(1)]: The realisation period available for these exports has been cut from eighteen months to twelve months.

Takeaway: These are regulatory ceilings. On an exporter’s request citing reasons for delay, an AD Bank may extend the period if satisfied with those reasons. AD Banks must maintain systems to monitor and follow up on realisation. Where an exporter’s proceeds remain unrealised for more than one year after the due date or any AD Bank-approved extension, further exports may be undertaken only against full advance payment or an irrevocable Letter of Credit.

2. Continuation of existing caution-listing status

A new proviso to Regulation 13 (unrealised exports) now states that exporters on RBI’s Caution List as on September 30, 2026, placed there under Regulation 16 of the 2015 Regulations, will continue to be governed by that caution listing order until they are removed from the list, notwithstanding the supersession of the 2015 Regulations on October 1.

Note: Caution listing carries its own procedural consequences under the Master Direction on Export of Goods and Services, including conditions subject to which a caution-listed exporter’s shipping documents may be accepted. These consequences are distinct from the restriction under Regulation 13, which applies where an exporter’s export proceeds remain unrealised beyond one year from the due date of realisation or any extended period allowed by an AD Bank. The proviso to Regulation 13 now preserves the existing caution-listing orders for exporters who were on the Caution List as on September 30, 2026, until they are removed from the Caution List.

3. Transitional powers of AD Banks over pre-October 1 transactions

A new Regulation 20 has been introduced, empowering AD Banks to handle transactions related to the export and import of goods and services, as well as merchanting trade, undertaken before October 1, 2026, that would otherwise have required RBI’s approval under the 2015 Regulations and the two corresponding Master Directions on the export and import of goods and services.

Takeaway: This provision addresses a transitional gap by allowing AD Banks to handle pre-October 1 transactions that previously required RBI approval. It complements Regulation 19(1), which requires each AD Bank to put in place “a separate, comprehensive, well-documented internal policy and SOP, for handling transactions (including the reporting thereof) related to export and import of goods and services as well as MTT.”

What the amendments change, at a glance

• The general realisation period for export proceeds has been restored to nine months — one of the measures the RBI Governor announced in June 2026 to attract foreign capital, now given statutory effect.
• The nine-month period also applies to goods exported to a warehouse outside India; the realisation period for exports invoiced or settled in Indian Rupees falls from eighteen months to twelve months.
• Exporters on RBI’s Caution List as of September 30, 2026 continue to be governed by their existing caution orders until removed from the list.
• Regulation 20 complements the discretion the EXIM Regulations already confer on AD Banks by enabling them to handle pre-October 1 transactions that would otherwise have required RBI approval.

Enhanced role of AD Banks

Beyond the specific amendments, the broader shift in this framework is the expanded role of AD Banks. Regulation 19 requires each AD Bank to develop an internal policy and SOP for handling export, import and merchanting trade transactions, and the new Regulation 20 empowers them to handle pre-October 1 transactions that would otherwise have required RBI approval. AD Banks now carry significantly more discretion under the new framework. How each bank exercises that discretion will determine the on-ground experience for exporters and importers.