RBI Notifies FEMA Export & Import Regulations, 2026: Consolidated Framework to Streamline Cross-Border Trade Compliance

The Reserve Bank of India (RBI) has carried out a detailed review of the existing rules related to export and import of goods and services under FEMA, 1999, after consulting various stakeholders. Based on this review, the RBI has issued the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026.

Objective of the 2026 Regulations

These new Regulations aim to make doing business easier, especially for small exporters and importers. They also give Authorised Dealers (banks) more flexibility so that they can provide faster and more efficient services to their customers.

Applicability

This compliance requirement applies to all transactions relating to the export and import of goods and services, including merchanting trade transactions (MTT).

Statutory Authority

The Regulations have been issued under the powers granted by:

• The Foreign Exchange Management Act, 1999 (FEMA)
• Section 10 – Powers of Authorised Persons
• Section 47 – RBI’s power to make regulations

FEMA governs all foreign exchange transactions in India, including export, import, remittances, and cross-border payments.

Consolidation of Regulatory Framework

The updated 2026 Regulations replace earlier fragmented directions and consolidate the framework governing export and import transactions into a unified regulatory structure.

This is aligned with the broader trade framework issued by the Government of India.

Rationale Behind the Review

The RBI reviewed the framework to:

• Align procedures with digital trade practices
• Simplify compliance for MSME exporters
• Reduce documentation burden
• Delegate more operational flexibility to Authorised Dealer (AD) banks
• Improve monitoring of export realisation and import payments
• Strengthen control over merchanting trade

Key Areas Covered in the 2026 Regulations

1. Export of Goods and Services

The Regulations address:

• Realisation and repatriation of export proceeds
• Time limits for receiving export payments
• Extension of time limits by AD banks
• Advance remittances for export

Export Realisation:  Export proceeds must generally be realised within the prescribed time period (typically 9 months, unless otherwise specified).

2. Import of Goods and Services

The Regulations cover:

• Advance payment for imports
• Time limits for import settlement
• Evidence of import (Bill of Entry requirements)
• Delayed import payments
• Interest payments on import dues

3. Merchanting Trade Transactions (MTT)

Merchanting trade refers to a transaction where goods are purchased from one foreign country and sold to another foreign country without entering India.

The Regulations prescribe:

• Strict timelines for completion
• Flow of funds through India
• No involvement of prohibited or restricted goods
• Compliance with anti-money laundering norms

Strengthened Role of Authorised Dealer (AD) Banks

Under FEMA, only banks authorised by the RBI known as Authorised Dealer (AD) Category-I banks, can handle foreign exchange transactions related to exports and imports.

The new Regulations significantly strengthen and expand their operational role, providing them with greater responsibility and flexibility in processing trade-related foreign exchange transactions.

These changes reflect the RBI’s continued effort to streamline foreign exchange compliance while strengthening India’s cross-border trade ecosystem.