How will the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, effective October 1, 2026, affect exporters of goods?
Goods invoiced or settled in INR get 12 months for realisation, against the nine-month period. The AD-bank may extend it. If proceeds remain unrealised for a year after the due or extended date, further exports can be made only against full advance or an irrevocable letter of credit (LC). Goods exported without consideration may be declared at nil value in the Export Declaration Form (EDF), apparently dispensing with the GR-waiver procedure. AD-banks may approve reduction or non-realisation of export value, set off export receivables against import payables, and permit third-party receipts.
How will the new Regulations affect importers of goods?
The existing six-month limit for import payments is replaced by the period specified in the contract. For advance remittances, the $200,000 threshold for a standby LC or guarantee gives way to thresholds fixed under each bank’s policy. If an import advance remains unadjusted and cannot be repatriated, subsequent advances will require an unconditional, irrevocable standby LC or bank guarantee. Advance remittance for importing gold and silver is prohibited, while the 90-day credit restriction for gold imports is removed.
How will the new Regulations affect exporters of services?
Services other than software become subject to an EDF declaration for the first time. A single EDF may cover a month’s service exports. For software, it must be filed within 30 days after month-end; for other services, by the payment-receipt date. Software exporters will use EDF instead of SOFTEX. Services invoiced or settled in INR get 12 months for realisation. The restriction on further exports where receivables remain overdue for more than one year will apply.
What changes will apply to importers of services?
Imports of services are brought into IDPMS reporting. The importer must submit documents to its bank, which must enter the details in IDPMS within five working days. Payment may follow the period agreed in the contract rather than the existing time limit, and the bank may extend that period. Interest on delayed payment cannot exceed the all-in-cost ceiling applicable to trade credit. Export receivables for goods may be adjusted against service-import payables, and service-export receivables against goods-import payables, including transactions with overseas group or associate companies.
What changes will affect merchant traders?
For merchanting trade—purchase from one foreign country and sale to another without the goods entering India—the nine-month completion limit is removed. The gap between outward and inward remittance, in either sequence, must not exceed six months, but the AD-bank may extend the period on request. AD-banks may also permit payment to or receipt from a third party after examining the reasons and relevant documents. Both legs…
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