FEMA Amendment Shortens Export Realisation Timelines: What Businesses Should Know

On September 22, 2026 the Reserve Bank of India notified the Foreign Exchange Management (Export and Import of Goods and Services) (Amendment) Regulations, 2026 (“amending regulations”) amending the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (“principal regulations”). As these regulations come into force on October 1, 2026, it is pertinent that businesses engaged in cross-border trade and Authorised Dealers who process foreign-exchange transactions take note of these changes.

The most significant change is to the timeline for realisation and repatriation of export proceeds under Regulation 5 of the principal regulations. For standard exports of goods and services, the period has been reduced to nine months from the earlier fifteen months. For ordinary goods, this period begins from the date of shipment, for goods exported to a warehouse outside India, the period begins from the date of sale of goods from the warehouse, and for services, the period begins from the date of invoice. In cases where the export of goods and services is invoiced or/and settled in Indian Rupees, the period of realisation and repatriation of export proceeds has been reduced to twelve months from the earlier eighteen months.

Another critical change is the introduction of Regulation 20 – ‘Powers to Authorised Dealers.’ It empowers Authorised Dealers (ADs) to handle transactions related to the export and import of goods and services, and merchanting trade. These transactions had necessitated direct, lengthy approvals from the RBI under the earlier FEMA framework. However, this regulation should not be read to constitute a blanket removal of RBI approval requirements, as it only concerns specific transactions governed by the FEMA Regulations, 2015 and RBI’s Master Directions on Import and Export of Goods and Services, and that were undertaken prior to October 01, 2026.

Thirdly, with respect to non-compliant exporters, the amending regulations clarify that exporters who were on the Caution List as of September 30, 2026 shall continue to remain subject to orders issued by the RBI under Regulation 16 of the FEMA Regulations, 2015, until they are formally removed from the list. This has been added as a proviso to Regulation 13 of the principal regulations.

For businesses and start-ups involved in importing/exporting goods or services, the first step must be to review existing transactions covered by Regulation 5 and ensure they are aligned with the requirements of the revised timelines. They should settle advance receipts and payments for exports and imports by the due dates to avoid restrictions on future exports or imports. Internal compliance calendars and receivables-monitoring systems should be updated accordingly. This transition to shorter realisation periods presents operational changes as it provides a very short window for renegotiation of export contracts and payment terms. Failure to comply could lead to regulatory default, potential caution-listing, or requirements for letters of credit and guarantees on future trade.

On the bright side, the decentralised authority granted to ADs under Regulation 20 significantly enhances operational efficiency and resolves administrative delays. Businesses must identify transactions undertaken before October 1, 2026 that remain pending or require regulatory action. They must consequently consult their ADs to determine whether Regulation 20 now permits the AD to handle the transaction instead of required RBI approvals. Exporters who were on the Caution List as of 30 September 2026 should continue complying with the applicable RBI orders until they are removed from the list.

The amending regulations signal a regulatory shift towards faster realisation of export proceeds, while at the same time recognising greater operational autonomy for Authorised Dealers. With immediate enforcement timelines require stakeholding businesses and start-ups to act quickly, prompt reviews of existing contracts, payment terms, and engagement with ADs can ensure due compliance with the Regulations.