RBI Brings Exports, Imports and Merchanting Trade Under Single FEMA Framework

The Reserve Bank of India has notified a new set of foreign exchange rules that bring exports, imports, and merchanting trade transactions under a single regulatory framework for the first time.

The Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 replace the 2015 rules, which were limited to exports of goods and services.

The regulations were notified on January 13, 2026, under the Foreign Exchange Management Act, 1999. They will come into force on October 1, 2026.

Imports and merchanting trade (transactions where an Indian entity buys goods from one foreign party and sells them to another without the goods entering India) are now part of a single regulatory framework.

One of the key changes is the introduction of a common Export Declaration Form, or EDF, that applies to both goods and services. Exporters of goods must declare the full value of exports at the time of shipment. For goods exported through Electronic Data Interchange ports, the declaration will be treated as part of the shipping bill.

The new regulations also explicitly extend the declaration framework to exports of services. Service exporters are required to submit the EDF within 30 days from the end of the month in which the invoice is raised. The rules allow filing a single declaration for multiple service exports in a month. Authorised dealers may permit delayed submission if satisfied with the reasons provided.

The regulations prescribe a standard timeline for realisation and repatriation of export proceeds. Export earnings from goods and services must be realised within fifteen months from the relevant date specified under the regulations. Where exports are invoiced or settled in Indian rupees, the time limit is eighteen months. Authorised dealers have the power to grant extensions on a case-by-case basis.

Several flexibilities that earlier operated through RBI circulars have now been written into the regulations. Banks may allow reduction in export realisation where the full value cannot be recovered. Export receivables may also be set off against import payables, subject to the conditions specified in the regulations. Third-party receipts and payments for export and import transactions are permitted, subject to checks by authorised dealers on the genuineness of the transactions.

On the import side, authorised dealers are required to monitor payments through the Import Data Processing and Monitoring System. They may grant extensions for delayed import payments after examining the reasons given by importers.

The regulations draw a clear exception for bullion trade. Advance remittance for the import of gold and silver is expressly prohibited, even though advance payments are otherwise permitted for imports.

The rules also place fresh compliance obligations on banks. Authorised dealers must put in place a separate and well-documented internal policy and standard operating procedures for handling export, import, and merchanting trade transactions.

These must clearly set out timelines, approval processes, and ways to address customer grievances. Banks are also required to disclose the policy and the key features of the SOP on their websites