RBI Notifies New Regulations For Export And Import Of Goods And Services

The Reserve Bank of India ("RBI") has notified the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 ("Regulations"), which will come into force from October 01, 2026. The Regulations replace the erstwhile Foreign Exchange Management (Export of Goods and Services) Regulations, 2015.

For the first time, the export and import of goods and services have been comprehensively covered under a single set of regulations. This brings procedural alignment and reduces the need to navigate multiple overlapping foreign exchange control regulations. The Regulations seek to streamline compliance, strengthen monitoring through digital reporting systems and provide greater clarity on timelines, documentation and permissible transaction structures.

The key provisions of the Regulations include the following:

1. Revised export declaration requirements

The Regulations have prescribed a revised Export Declaration Form ("EDF") which would be required to be submitted by exporters. This Form consolidates previous form SOFTEX and the Regulations prescribe the frequency at which the EDF is to be filed. AD Banks have been given the power to extend applicable timelines for submission of an EDF based on a reasonable request from an exporter.

2. Defined timelines for realisation and repatriation of export proceeds

The Regulations continue the existing 15-month timeline for realisation and repatriation of export proceeds, including by way of set-off. For exports invoiced or settled in Indian Rupees, the timeline has been extended to 18 months. AD Banks have been given the power to extend applicable timelines based on a reasonable request from an exporter.

3. Simplified closure for low-value transactions

The Regulations continue the Export Data Processing and Monitoring System ("EDPMS") and Import Data Processing and Monitoring System ("IDPMS") based monitoring by the AD Banks. As a facilitative change, lower-value transactions not exceeding INR 10,00,000 per invoice or shipping bill may now be closed based on exporter or importer declarations.

4. Set-off, third-party payments and merchanting trade transactions

The Regulations continue to permit commonly used cross-border settlement mechanisms, such as set-off arrangements, third party receipts and payments and merchanting trade transactions, consistent with the earlier framework. Set-off of export receivables against import payables with the same overseas counterparty or group entity, as well as third party settlements, remain permissible subject to satisfaction of the AD Bank. In relation to merchanting trade transactions, the Regulations codify the existing requirement that the entire transaction, including receipt from the overseas buyer and payment to the overseas supplier must be completed within a maximum period of 6 months.

5. Advance payments and related safeguards

The Regulations retain the existing framework for advance receipts for exports and advance payments for imports. Requirements relating to routing of amounts through the same AD Bank, flexibility to change AD Banks upon intimation, AD Bank discretion to permit advance remittances and to require additional safeguards such as standby letters of credit or guarantees beyond prescribed thresholds, remains unchanged. The interest cap payable on advance receipts for exports and delayed payments for imports, linked to the all-in-cost ceiling applicable to trade credit, remains unchanged. The prohibition on advance remittance for the import of gold and silver also continues under the Regulations.

6. Import not materialized and unrealized exports

The Regulations continue the existing consequences applicable where imports do not materialise or export proceeds remain unrealised. The obligation to repatriate advance payments where imports are not completed within the contractual or extended period remains unchanged. However, the Regulations now expressly link non-repatriation and failure to mark off the relevant IDPMS entry to enhanced safeguards for future import advances, which must be supported by an irrevocable standby letter of credit or an appropriate bank guarantee.

Similarly, the restriction on exporters whose export proceeds remain unrealised beyond 1 year from the due date or extended period has been retained. In such cases, further exports may continue only against receipt of full advance payment or under an irrevocable letter of credit, in line with the earlier framework.

7. Special export situations

The Regulations retain the existing treatment for specialised export scenarios. Provisions relating to exports against repayment of State credits granted by the erstwhile Soviet Union remain unchanged, with AD Banks continuing to follow RBI instructions governing the applicable inter-banking arrangements. The framework for project exports is also retained, with the Regulations expressly recognising the permissibility of receipts and payments under the underlying project contract and the deployment of temporary cash surpluses abroad, subject to monitoring by the AD Banks.

8. Reporting and digital monitoring

While EDPMS/IDPMS reporting existed earlier, the Regulations now expressly codify detailed obligations on AD Banks for data entry, monitoring, mark-off and closure of transactions, including specific timelines. The Regulations also formally integrates reporting of all foreign trade transactions through FETERS, strengthening RBI's regulatory visibility and enforcement framework.

Practical implications

The Regulations reinforce RBI's emphasis on timely realisation, digital monitoring and accountability while offering procedural flexibility for low value transactions. Exporters, importers and multinational groups will need to realign internal processes, contractual timelines and banking coordination ahead of the effective date. An early review of existing trade documentation and invoicing practices will help ensure a smooth transition to the new regulatory regime.

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