Master Direction – Export of Goods and Services (Updated as on January 12, 2026)
16/2015-16 Dated:- 1-1-2016 Master Direction
FEMA
RBI/FED/2015-16/11
FED Master Direction No. 16/2015-16
January 1, 2016
(Updated as on January 12, 2026)
(Updated as on November 14, 2025)
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To,
All Authorised Dealer Category – I banks
Madam / Sir,
Master Direction – Export of Goods and Services
Export of Goods and Services from India is governed by Section 7 of the F
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his Master Direction is furnished in the Appendix. Reporting instructions can be found in Master Directions on reporting (Master Direction No. 18 dated January 01, 2016)
4. It may be noted that, whenever necessary, Reserve Bank shall issue directions to Authorised Persons through A.P. (DIR Series) Circulars in regard to any change in the Regulations or the manner in which relative transactions are to be conducted by the Authorised Persons with their customers/ constituents. The Master Direction issued herewith shall be amended suitably simultaneously. This Master Direction is issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 and is without prejudice to permissions/ approvals, if any, required under any other law.
Yours faithfully,
(Dr Aditya Gaiha)
Chief General Manager-in-Charge
INDEX
PART – A General
A.1
Introduction
A.2
Realization and repatriation of proceeds of export of goods / software / services
A.3
Manner of receipt and paym
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solidation of air cargo/ sea cargo
B.12
Exemption from Declaration
PART -C Obligations of Authorised Dealers
C.1
Grant of EDF waiver
C.2
Receipt of advance against exports
C.3
EDF Approval for Trade Fair/Exhibitions abroad
C.4
EDF approval for export of goods for re-imports
C.5
Re-export of unsold rough diamonds from Special Notified Zone of Customs without Export Declaration Form (EDF) formality
C.6
Foreign Currency accounts of Overseas branches/office, representatives of Indian entities
C.7
Delay in submission of shipping documents by exporters
C.8
Return of documents to exporters
C.9
Landlocked countries
C.10
Direct dispatch of documents by the exporter
C.11
Part Drawings /Undrawn Balances
C.12
Consignment Exports
C.13
Opening / hiring of warehouses abroad
C.14
Export Bills Register
C.15
Follow-up of overdue bills
C.16
Reduction in invoice value on account of prepayment of usance bills
C.17
Reduction in invoice value in other cases
C.18
Change
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gional offices, functioning under the Ministry of Commerce and Industry, Department of Commerce, Government of India. Policies and procedures required to be followed for exports from India are announced by the DGFT, from time to time.
(ii) AD Category – I banks may conduct export transactions in conformity with the Foreign Trade Policy in vogue and the Rules framed by the Government of India and the Directions issued by Reserve Bank from time to time. In exercise of the powers conferred by clause (a) of sub-section (1) and sub-section (3) of Section 7 and sub-section (2) of Section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999), the Reserve Bank has notified the 2Foreign Exchange Management (Export of Goods and Services) Regulations, 2015 relating to export of goods and services from India, hereinafter referred to as the 'Export Regulations'. These Regulations have been notified vide Notification No. FEMA 23(R)/2015-RB dated January 12, 2016.
(iii) The directions contai
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, provided it is through a freely convertible Vostro account of a non-resident bank situated in any country other than a member country of Asian Clearing Union (ACU) or Nepal or Bhutan. Additionally, rupee payment through Vostro account must be against payment in free foreign currency by buyer in his non-resident bank account. Free foreign exchange remitted by buyer to his non-resident bank (after deducting bank service charges) on account of this transaction would be taken as export realization under export promotion schemes of FTP.
(c) Contracts (for which payments are received through Asian Clearing Union (ACU) shall be denominated in ACU Dollar. However, participants in the ACU may settle their transactions in ACU Dollar or in ACU Euro as per RBI Notifications. Central Government may relax provisions of this paragraph in appropriate cases. Export contracts and invoices can be denominated in Indian rupees against EXIM Bank/Government of India line of credit.
(d) Invoicing, payment
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ndent bank of the partner country.
(vi) Any reference to the Reserve Bank should first be made to the Regional Office of the Foreign Exchange Department situated in the jurisdiction where the applicant person resides, or the firm / company functions, unless otherwise indicated. If, for any particular reason, they desire to deal with a different office of the Foreign Exchange Department, they may approach the Regional Office of their jurisdiction for necessary approval. Such references should be routed through the Compliance Head of the AD bank.
(vii) “Financial Year” (April to March) is reckoned as the time base for all transactions pertaining to trade related issues.
A.2 Realization and repatriation of proceeds of export of goods / software / services
It is obligatory on the part of the exporter to realise and repatriate the full value of goods / software / services to India within a stipulated period from the date of export, as under:
(i) It has been decided in consultation with
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23, 2025, AD banks may allow exporters to realise and repatriate full export value of goods exported to 'Bharat Mart' within nine months from the date of sale of the goods from the warehouse.
A.3 Manner of receipt and payment
(i) The amount representing the full export value of the goods exported shall be received through an AD Bank in the manner specified in the Foreign Exchange Management (Manner of Receipt & Payment) Regulations, 2023 notified vide Notification No. FEMA 14(R)/2023-RB dated December 21, 2023.
(ii) When payment for goods sold to overseas buyers during their visits is received in this manner, EDF (duplicate) should be released by the AD Category – I banks only on receipt of funds in their Nostro account or if the AD Category – I bank concerned is not the Credit Card servicing bank, on production of a certificate by the exporter from the Credit Card servicing bank in India to the effect that it has received the equivalent amount in foreign exchange, AD Category – I b
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aintain ACU Dollar, ACU Euro and ACU Japanese Yen accounts with their correspondent banks in other participating countries. All eligible payments are required to be settled by the concerned banks through these accounts.
c) Relaxation from ACU Mechanism- Indo-Myanmar Trade – Trade transactions with Myanmar can be settled in any freely convertible currency in addition to the ACU mechanism.
d) In view of the difficulties being experienced by importers/exporters in payments to / receipts from Iran, it has been decided that with effect from December 27, 2010, all eligible current account transactions including trade transactions with Iran should be settled in any permitted currency outside the ACU mechanism, until further notice.
e) 10All eligible current account transactions including trade transactions with Sri Lanka may be settled in any permitted currency outside the ACU mechanism with effect from July 08, 2022, until further notice.
f) In view of the understanding reached among the
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/ import transactions
Taking into account the evolving international trade practices, it has been decided to permit third party payments for export / import transactions subject to conditions as under:
a) Firm irrevocable order backed by a tripartite agreement should be in place. However, it may not be insisted upon in cases where documentary evidence for circumstances leading to third party payments / name of the third party being mentioned in the irrevocable order/ invoice has been produced subject to:
(i) AD bank should be satisfied with the bona-fides of the transaction and export documents, such as, invoice / FIRC.
(ii) AD bank should consider the FATF statements while handling such transaction.
b) Third party payment should be routed through the banking channel only;
c) The exporter should declare the third party remittance in the Export Declaration Form and it would be responsibility of the Exporter to realise and repatriate the export proceeds from such third party named
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payment being made for import of goods.
(vi) 12Settlement of Export transactions in currencies not having a direct exchange rate
To further liberalise the procedure and facilitate settlement of export transactions where the invoicing is in a freely convertible currency and the settlement takes place in the currency of the beneficiary, which though convertible, does not have a direct exchange rate, it has been decided that AD Category-I banks may permit settlement of such export transactions (excluding those put through the ACU mechanism), subject to conditions as under:
* Exporter shall be a customer of the AD Bank,
* Signed contract / invoice is in a freely convertible currency,
* The beneficiary is willing to receive the payment in the currency of beneficiary instead of the original (freely convertible) currency of the invoice/ contract, Letter of Credit as full and final settlement,
* AD bank is satisfied with the bonafides of the transactions, and
* The counterparty to
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i) Exchange rate between the currencies of the two trading partner countries may be market determined.
(iii) The settlement of trade transactions under this arrangement shall take place in INR in accordance with the procedure laid down in Para c.
c) In terms of Regulation 7(1) of Foreign Exchange Management (Deposit) Regulations, 2016, AD banks in India have been permitted to open Rupee Vostro Accounts. Accordingly, for settlement of trade transactions with any country, AD bank in India may open Special Rupee Vostro Accounts of correspondent bank/s of the partner trading country. In order to allow settlement of international trade transactions through this arrangement, it has been decided that:
(i) Indian importers undertaking imports through this mechanism shall make payment in INR which shall be credited into the Special Vostro account of the correspondent bank of the partner country, against the invoices for the supply of goods or services from the overseas seller /supplier.
(ii
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unts are first used towards payment obligations arising out of already executed export orders / export payments in the pipeline. The said permission would be in accordance with the conditions mentioned in para-C.2 on Receipt of advance against exports under Master Direction on Export of Goods and Services 2016 (as amended from time to time). In order to ensure that the advance is released only as per the instructions of the overseas importer, the Indian bank maintaining the Special Vostro account of its correspondent bank shall, apart from usual due diligence measures, verify the claim of the exporter with the advice received from the correspondent bank before releasing the advance.
f) 'Set-off' of export receivables against import payables in respect of the same overseas buyer and supplier with facility to make/receive payment of the balance of export receivables/import payables, if any, through the Rupee Payment Mechanism may be allowed, subject to the conditions mentioned in para C
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company in terms of guidelines and limits prescribed vide AP DIR Circular No.13 dated October 03, 2025.
i) Reporting of cross- border transactions need to be done in terms of the extant guidelines under FEMA 1999.
j) AD Category-I banks may open/close Special Rupee Vostro Accounts in the name of their overseas branches or correspondents without prior reference to the Reserve Bank16 AD bank maintaining the Special Rupee Vostro Account shall ensure that the correspondent bank is not from a country or jurisdiction in the updated FATF Public Statement on High Risk & Non Co-operative Jurisdictions on which FATF has called for counter measures.
A.4 Foreign Currency Account
(i) Participants in international exhibition/trade fair have been granted general permission vide 17Regulation 5(E)(5) of Foreign Exchange Management (Foreign Currency Accounts by a person Resident in India) Regulations dated January 21, 2016 for opening a temporary foreign currency account abroad. Exporters may depos
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a foreign currency account with a bank outside India, in the name of its overseas office/branch, by making remittance for the purpose of normal business operations of the said office/branch or representative subject to conditions stipulated in 18Regulation 5 (B) of Foreign Exchange Management (Foreign Currency Accounts by a person Resident in India) Regulations dated January 21, 2016.
(iv) A unit located in a Special Economic Zone (SEZ) may open, hold and maintain a Foreign Currency Account with an AD Category – I bank in India subject to conditions stipulated in 19Regulation 4 (D) of Foreign Exchange Management (Foreign Currency Accounts by a person Resident in India) Regulations dated January 21, 2016.
(v) A person resident in India being a project / service exporter may open, hold and maintain foreign currency account with a bank outside or in India, subject to the standard terms and conditions in the Memorandum PEM.
20(vi)
A person resident in India, being an exporter, may open
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and / or studded with / without diamond and / or other stones, with a track record of at least three years21 in import / export of diamonds / colored gemstones / diamond and colored gemstones studded jewellery / plain gold jewellery and having an average annual turnover of Rs. 3 crores or above during the preceding three licensing years (licensing year is from April to March) are permitted to transact their business through Diamond Dollar Accounts.
(ii) They may be allowed to open not more than five Diamond Dollar Accounts with their banks.
(iii) Eligible firms and companies may apply for permission to their AD Category – I banks in the format prescribed.
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(iv) Conditions mentioned at Para A.6 (iv) a) & b) shall also apply.
A.6 Exchange Earners' Foreign Currency Account (EEFC Account)
(i) A person resident in India may open with, an AD Category – I bank in India, an account in foreign currency called the Exchange Earners' Foreign Currency (EEFC) Account, in terms of 23Regulatio
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rd commitments.
b) The facility of EEFC scheme is intended to enable exchange earners to save on conversion/transaction costs while undertaking forex transactions. This facility is not intended to enable exchange earners to maintain assets in foreign currency, as India is still not fully convertible on Capital Account.
(v) The eligible credits represent –
a) inward remittance received through normal banking channel, other than the remittance received pursuant to any undertaking given to the Reserve Bank or which represents foreign currency loan raised or investment received from outside India or those received for meeting specific obligations by the account holder.
b) payments received in foreign exchange by a 100 per cent Export Oriented Unit or a unit in Export Processing Zone, Software Technology Park or Electronic Hardware Technology Park for supply of goods to similar such unit or to a unit in Domestic Tariff Area and also payments received in foreign exchange by a unit in Dom
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er trade proposals involving adjustment of value of goods imported into India against value of goods exported from India in terms of an arrangement voluntarily entered into between the Indian party and the overseas party through an Escrow Account opened in India in US Dollar will be considered by the Reserve Bank subject to following conditions:
(i) All imports and exports under the arrangement should be at international prices in conformity with the Foreign Trade Policy and Foreign Exchange Management Act, 1999 and the Rules and Regulations made there under.
(ii) No interest will be payable on balances standing to the credit of the Escrow Account but the funds temporarily rendered surplus may be held in a short-term deposit up to a total period of three months in a year (i.e., in a block of 12 months) and the banks may pay interest at the applicable rate.
(iii) No fund based/or non-fund based facilities would be permitted against the balances in the Escrow Account.
(iv) Applicatio
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ey will collect the EDF for goods loaded at these stations so that the goods may move straight on to the foreign country without further formalities at the border. The list of designated railway stations can be obtained from the Railways. For goods loaded at stations other than the designated stations, exporters must arrange to present EDF to the Customs Officer at the Border Land Customs Station where Customs formalities are completed.
A.9 Border trade with Myanmar
In supersession of instructions contained in A.P. (DIR Series) Circular No. 17 dated October 16, 2000, barter system of trade at the Indo-Myanmar border has been discontinued and replaced with normal trade with effect from December 1, 2015. Accordingly, all trade transactions with Myanmar, including those at the Indo-Myanmar border with effect from December 1, 2015 shall be settled in any permitted currency in addition to the Asian Clearing Union mechanism.
A.10 Counter -Trade arrangements with Romania
The Reserve Bank
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de in advance in one lump sum or at monthly intervals as approved by the authority concerned.
A.13 Export factoring on non-recourse basis
AD banks have been permitted to factor the export receivables on a non-recourse basis, so as to enable the exporters to improve their cash flow and meet their working capital requirements subject to conditions as under:
* AD banks may take their own business decision to enter into export factoring arrangement on non-recourse basis. They should ensure that their client is not over financed. Accordingly, they may determine the working capital requirement of their clients taking into account the value of the invoices purchased for factoring. The invoices purchased should represent genuine trade invoices.
* In case the export financing has not been done by the Export Factor, the Export Factor may pass on the net value to the financing bank/ Institution after realising the export proceeds.
* AD bank, being the Export Factor, should have an arrange
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'Project Exports' and 'Service Exports' are laid down in the revised Memorandum of Instructions on Project and Service Exports (PEM-July 2014).
(ii) Accordingly, AD banks / Exim Bank may consider awarding post-award approvals without any monetary limit and permit subsequent changes in the terms of post award approval within the relevant FEMA guidelines / regulations. Project and service exporters may approach AD banks / Exim Bank based on their commercial judgment. The respective AD bank / Exim Bank should monitor the projects for which post-award approval has been granted by them.
(iii) In order to provide greater flexibility to project & service exporters in conducting their overseas transactions, facilities have been provided as under:
a) Inter-Project transfer of machinery – The stipulation regarding recovery of market value (not less than book value) of the machinery, etc., from the transferee project has been withdrawn. Further, exporters may use the machinery / equipment for
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ating of which should be at least A-1/AAA by Standard & Poor or P-1/-AAA by Moody's or F1/AAA by Fitch IBCA etc., and as deposits with branches / subsidiaries outside India of AD Category – I banks in India.
d) Repatriation of funds in case of On-site Software Contracts – The requirement of repatriation of 30 per cent of contract value in respect of on-site contracts by software exporter company / firm has been dispensed with. They should, however, repatriate the profits of on-site contracts after completion of the contracts.
A.15 Export of goods on lease, hire, etc.
Prior approval of the Reserve Bank is required for export of machinery, equipment, etc., on lease, hire basis under agreement with the overseas lessee against collection of lease rentals/hire charges and ultimate re-import. Exporters should apply for necessary permission, through an AD Category – I banks, to the Regional Office concerned of the Reserve Bank, giving full particulars of the goods to be exported.
A.16 Exp
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isiting India may take outside India currency notes of Government of India and Reserve Bank of India notes up to an amount not exceeding Rs. 25,000 (Rupees twenty five thousand only) while exiting only through an airport.
PART-B EDF / SOFTEX Procedure
B.1 Export of goods through Customs ports
(i) Customs shall certify the value declared and give running serial number on the two copies of Export Declaration Form (EDF), submitted by exporter at Non- Electronic Data Interchange (EDI) port.
(ii) Customs shall retain the original EDF for transmission to the Reserve Bank and return the duplicate copy to the exporter.
(iii) At the time of shipment of goods, exporters shall submit the duplicate copy of the EDF to Customs. After examining the goods, Customs shall certify the quantity in the form and return it to the exporter for submission to AD for negotiation or collection of export bills.
(iv) Within 21 days from the date of export, exporter shall lodge the duplicate copy together with
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uthority concerned shall hand over to the exporter, one copy of the shipping bill marked 'Exchange Control (EC) Copy' for being submitted to the AD bank within 21 days from the date of export for collection/negotiation of shipping documents. However, in cases where EC copy of shipping bill is not printed in terms of CBEC's Circular No. 55/2016-Customs dated November 23, 2016 and data of shipping bill is integrated with EDPMS, requirement of submission of EC copy of shipping bill with the AD bank would not be there.
(iii) The manner of disposal of EC copy of Shipping Bill shall be the same as that for EDF. The duplicate copy of the form together with a copy of invoice etc. shall be retained by ADs and may not be submitted to the Reserve Bank. The question of disposal of EC copy of shipping bill will, however, not arise where EC copy of shipping bill is not printed in terms of CBEC's Circular No.55/2016-Customs dated November 23, 2016 and data of shipping bill is integrated with EDPMS.
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r ensuring that the parcel has been addressed to their branch or correspondent bank in the country of import and return the original copy to the exporter, who shall then submit the EDF to the post office with the parcel.
(ii) The duplicate copy of EDF shall be retained by the AD to whom the exporter shall submit relevant documents together with an extra copy of invoice for negotiation/collection, within the prescribed period of 21 days.
(iii) The concerned overseas branch or correspondent shall be instructed to deliver the parcel to consignee against payment or acceptance of relative bill.
(iv) AD may, however, countersign EDF covering parcels addressed direct to the consignees, provided:
* An irrevocable letter of credit for the full value of export has been opened in favor of the exporter and has been advised through the AD concerned.
Or
* The full value of the shipment has been received in advance by the exporter through an AD.
Or
* The AD is satisfied, on the basis of
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gard has been rationalised in consultation with the Government of India as outlined below should be followed by the exporter in conformity with Regulation 3 of Notification No.FEMA.23 (R)/2015-RB dated January 12, 2016.
a) The exporters may submit the EDF, duly signed by the Master of the vessel in lieu of Custom certification, indicating the composition of the catch, quantity, export value, date of shipment (date of transfer of catch), etc duly supported by a certificate from an international cargo surveyor.
b) Bill of Lading / receipt of trans-shipment issued by the carrier vessel should include the EDF Number.
c) The prescribed period of realization and repatriation should be reckoned with reference to the date of transfer of catch as certified by the Master of the vessel or the date of the invoice, whichever is earlier.
d) The EDF, both original and duplicate, should indicate the number and date of Letter of Permit issued by Ministry of Agriculture for operation of the vessel.
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electronic format to RBI, the exporters now have to submit the SOFTEX form in duplicate as per the revised procedure. STPI/SEZ will retain one copy and handover duplicate copy to exporters after due certification. As hitherto, the exporters have to provide information about all the invoices including the ones lesser than US$25000, in the bulk statement in excel format.
(ii) A common “SOFTEX Form” has been devised to declare single as well as bulk software exports.
(iii) Reserve Bank of India has extended the facility for online generation of the EDF Form Number and the SOFTEX Form Number (Single as well as Bulk for use in off-site software exports). The facility of manual allotment of single as well bulk SOFTEX form number by Regional Offices of RBI has been dispensed with accordingly.
(iv) Invoicing of software exports
a) For long duration contracts involving series of transmissions, the exporters should bill their overseas clients periodically, i.e., at least once a month or on r
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them.
d) The invoices raised on overseas clients as at (a) to (c) above will be subject to valuation of export declared on SOFTEX form by the designated official concerned of the Government of India and consequent amendment made in the invoice value, if necessary.
B.6 Citing of specific identification numbers
In all applications / correspondence with the Reserve Bank, the specific identification number as available on the EDF and SOFTEX forms should invariably be cited.
B.7 Export of Services
it is clarified that, in respect of export of services to which none of the Forms specified in these Regulations apply, the exporter may export such services without furnishing any declaration, but shall be liable to realise the amount of foreign exchange which becomes due or accrues on account of such export, and to repatriate the same to India in accordance with the provisions of the Act, and these Regulations, as also other rules and regulations made under the Act.
B.8 Third party export
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oon as it is obtained.
(ii) Where a shipment has been entirely shut out and there is delay in making arrangements to re-ship, the exporter will give notice in duplicate to the Customs in the form and manner prescribed, attaching thereto the unused duplicate copy of EDF and the shipping bill. The Customs will verify that the shipment was actually shut out, certify the copy of the notice as correct and forward it to the Reserve Bank together with unused duplicate copy of the EDF. In this case, the original EDF received earlier from Customs will be cancelled. If the shipment is made subsequently, a fresh set of EDF should be completed.
B.11 Consolidation of air cargo/sea cargo
(i) Consolidation of air cargo
a) Where air cargo is shipped under consolidation, the airline company's Master Airway Bill will be issued to the Consolidating Cargo Agent. The Cargo agent in turn will issue his own House Airway Bills (HAWBs) to individual shippers.
b) AD Category – I banks may negotiate HAWBs o
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'relative sale contract' with overseas buyer provides for acceptance of FCR as a shipping document in lieu of bill of lading. However, the acceptance of such FCR for purchase/discount would purely be the credit decision of the bank concerned who, among others, should satisfy itself about the bona fides of the transaction and the track record of the overseas buyer and the Indian supplier since FCRs are not negotiable documents. It would be advisable for the exporters to ensure due diligence on the overseas buyer, in such cases.
B.12 Exemption from Declaration
The requirement of declaration of export of goods and software in the prescribed form will not apply to the cases indicated in Regulation 4 of 24Notification No.FEMA.23 (R)/2015-RB dated January 12, 2016. The exporters shall, however, be liable to realise and repatriate export proceeds as per FEMA Regulations.
PART-C Obligations of Authorised Dealers
C.1 Grant of EDF waiver
25AD Category – I banks may consider request
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verage annual export realisation during preceding three licensing years.
Such free of cost supplies shall not be entitled to Duty Drawback or any other export incentive under any export promotion scheme.
Exports of goods not involving any foreign exchange transaction directly or indirectly requires the waiver of EDF procedure from the Reserve Bank.
C.2 Receipt of advance against exports
(1) In terms of Regulation 15 of Notification No. FEMA 23 (R)/2015-RB dated January 12, 2016, where an exporter receives advance payment (with or without interest), from a buyer outside India, the exporter shall be under an obligation to ensure that the shipment of goods is made within three years26 from the date of receipt of advance payment; the rate of interest, if any, payable on the advance payment does not exceed London Inter-Bank Offered Rate (LIBOR)/ 27any other widely accepted / Alternative reference rate + 100 basis points; and the documents covering the shipment are routed through the AD
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banks can also allow exporters having a minimum of three years' satisfactory track record to receive long term export advance up to a maximum tenor of 10 years to be utilized for execution of long term supply contracts for export of goods subject to the conditions as under:
(i) Firm irrevocable supply orders and contracts should be in place. The contract with the overseas party/ buyer should be vetted and the same shall clearly specify the nature, amount and delivery timelines of the products over the years and penalty in case of non-performance or contract cancellation. Product pricing should be in consonance with prevailing international prices.
(ii) Company should have capacity, systems and processes in place to ensure that the orders over the duration of the said tenure can actually be executed.
(iii) The facility is to be provided only to those entities, which have not come under the adverse notice of Enforcement Directorate or any such regulatory agency or have not been cauti
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among others, prudential requirements based on board approved policy.
a) BG / SBLC may be issued for a term not exceeding two years at a time and further rollover of not more than two years at a time may be allowed subject to satisfaction with relative export performance as per the contract.
b) BG / SBLC should cover only the advance on reducing balance basis.
c) BG / SBLC issued from India in favor of overseas buyer should not be discounted by the overseas branch / subsidiary of bank in India.
Note: AD Category – I banks may also be guided by the Master Circular on Guarantees and Co-acceptances issued by Department of Banking Regulation.
(xii) AD Category – I banks may allow the purchase of foreign exchange from the market for refunding advance payment credited to EEFC account only after utilizing the entire balances held in the exporter's EEFC accounts maintained at different branches/banks.
(3) AD Category- I banks may allow exporters to receive advance payment for export of
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e of refund exceeding 10% of the advance payment received in the last three years;
(vii) The documents covering the shipment should be routed through the same authorised dealer bank; and
(viii) In the event of the exporter's inability to make the shipment, partly or fully, no remittance towards refund of unutilized portion of advance payment or towards payment of interest should be made without the prior approval of the Reserve Bank.
(4) (i) As it has been observed that there is substantial increase in the number and amount of advances received for exports remaining outstanding beyond the stipulated period on account of non-performance of such exports (shipments in case of export of goods), AD Category -I banks are advised to efficiently follow up with the concerned exporters in order to ensure that export performance (shipments in case of export of goods) are completed within the stipulated time period.
(ii) It is further reiterated that AD category -I banks should exercise pr
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items for display or display-cum-sale in trade fairs/exhibitions outside India subject to the following:
(i) The exporter shall produce relative Bill of Entry within one month of re-import into India of the unsold items.
(ii) The exporter shall report to the AD Category – I banks the method of disposal of all items exported, as well as the repatriation of proceeds to India.
(iii) Such transactions approved by the AD Category – I banks will be subject to 100 per cent audit by their internal inspectors/auditors.
C.4 EDF approval for export of goods for re-imports
(i) AD Category – I banks may consider request from exporters for granting EDF approval in cases where goods are being exported for re-import after repairs / maintenance / testing / calibration, etc., subject to the condition that the exporter shall produce relative Bill of Entry within one month of re-import of the exported item from India.
(ii) Where the goods being exported for testing are destroyed during testing, AD
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d by the Central Board of Indirect Taxes & Customs, Department of Revenue, Ministry of Finance, Government of India for the above purpose, Bill of Entry shall be filed by the buyer. AD bank may permit such import payments after being satisfied with the bona-fides of the transaction. Further, AD bank shall also maintain a record of such transactions.
C.6 Foreign Currency Accounts of Overseas branches/office, representatives of Indian entities
(1) (i) At the time of setting up of the office, AD Category – I banks may allow remittances towards initial expenses up to fifteen per cent of the average annual sales/income or turnover during the last two financial years or up to twenty-five per cent of the net worth, whichever is higher.
(ii) For recurring expenses, remittances up to ten per cent of the average annual sales/income or turnover during the last two financial years may be sent for the purpose of normal business operations of the office (trading/non-trading)/branch or representat
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able property outside India for its business and for residential purpose of its staff.
(v) The overseas office / branch of software exporter company/firm may repatriate to India 100 per cent of the contract value of each 'off-site' contract.
(vi) In case of companies taking up 'on site' contracts, they should repatriate the profits of such 'on site' contracts after the completion of the said contracts.
(vii) An audited yearly statement showing receipts under 'off-site' and 'on-site' contracts undertaken by the overseas office, expenses and repatriation thereon may be sent to the AD Category – I banks.
(2) In terms of A.P.(DIR Series) Circular No 03 dated April 23, 2025, AD banks may allow remittances by the Indian exporter for initial as well as recurring expenses for setup and continuing business operations of its offices without any pre-conditions, after verifying the reasonableness of the same.
C.7 Delay in submission of shipping documents by exporters
In cases where exporters
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spatch shipping documents to their overseas branches/correspondents expeditiously. However, they may dispatch shipping documents direct to the consignees or their agents resident in the country of final destination of goods in cases where:
a) Advance payment or an irrevocable letter of credit has been received for the full value of the export shipment and the underlying sale contract/letter of credit provides for dispatch of documents direct to the consignee or his agent resident in the country of final destination of goods.
b) The AD Category – I banks may also accede to the request of the exporter provided the exporter is a regular customer and the AD Category – I bank is satisfied, on the basis of standing and track record of the exporter and arrangements have been made for realization of export proceeds.
(ii) AD Category – I banks may also permit 'Status Holder Exporters' (as defined in the Foreign Trade Policy), and units in Special Economic Zones (SEZ) to dispatch the expo
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ry – I bank is satisfied about the bonafides of the transaction.
In case of doubt, the AD Category – I bank may consider filing Suspicious Transaction Report (STR) with FIU_IND (Financial Intelligence Unit in India).
C.11 Part Drawings/ Undrawn Balances
(i) In certain lines of export trade, it is the practice to leave a small part of the invoice value undrawn for payment after adjustment due to differences in weight, quality, etc., to be ascertained after arrival and inspection, weighment or analysis of the goods. In such cases, AD Category – I banks may negotiate the bills, provided:
a) The amount of undrawn balance is considered normal in the particular line of export trade, subject to a maximum of 10 per cent of the full export value.
b) An undertaking is obtained from the exporter on the duplicate of EDF forms that he will surrender/account for the balance proceeds of the shipment within the period prescribed for realization.
(ii) In cases where the exporter has not been able
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duct from sale proceeds of the goods expenses normally incurred towards receipt, storage and sale of the goods, such as landing charges, warehouse rent, handling charges, etc. and remit the net proceeds to the exporter.
(iii) The account sales received from the Agent/Consignee should be verified by the AD Category – I banks. Deductions in Account Sales should be supported by bills/receipts in original except in case of petty items like postage/cable charges, stamp duty, etc.
(iv) In case the goods are exported on consignment basis, freight and marine insurance must be arranged in India.
(v) AD Category – I banks may allow the exporters to abandon the books, which remain unsold at the expiry of the period of the sale contract. Accordingly, the exporters may show the value of the unsold books as deduction from the export proceeds in the Account Sales.
C.13 Opening / hiring of warehouses abroad
(1) AD Category – I banks may consider the applications received from exporters and grant
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of the same.
C.14 Export Bills Register
AD Category – I banks should maintain Export Bills Register, in physical or electronic form aligned with Export Data Processing and Monitoring System (EDPMS). The bill number should be given to all type of export transactions on a financial year basis (i.e. April to March) and same should be reported in EDPMS.
C.15 Follow-up of overdue bills
(i) AD Category – I banks should closely watch realization of bills and in cases where bills remain outstanding, beyond the due date for payment from the date of export, the matter should be promptly taken up with the concerned exporter. If the exporter fails to arrange for delivery of the proceeds within the stipulated period or seek extension of time beyond the stipulated period, the matter should be reported to the Regional Office concerned of the Reserve Bank stating, where possible, the reason for the delay in realizing the proceeds.
(ii) The duplicate copies of EDF/SOFTEX Forms should, continue to
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on the unexpired period of usance, calculated at the rate of interest stipulated in the export contract or at the prime rate/LIBOR/ 27any other widely accepted / Alternative reference rate of the currency of invoice where rate of interest is not stipulated in the contract.
C.17 Reduction in invoice value in other cases
(i) If, after a bill has been negotiated or sent for collection, its amount is to be reduced for any reason, AD Category – I banks may approve such reduction, if satisfied about genuineness of the request, provided:
a) The reduction does not exceed 25 per cent of invoice value:
b) It does not relate to export of commodities subject to floor price stipulations
c) The exporter is not on the exporters' caution list of the Reserve Bank,
d) The exporter is advised to surrender proportionate export incentives availed of, if any.
(ii) In the case of exporters who have been in the export business for more than three years, reduction in invoice value may be allowed, witho
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f export. Where the reduction in value exceeds 25%, all other relevant conditions stipulated in paragraph C.17 should also be satisfied.
C.19 Export of goods by Special Economic Zones (SEZs)
(i) Units in SEZs are permitted to undertake job work abroad and export goods from that country itself subject to the conditions that:
a) Processing / manufacturing charges are suitably loaded in the export price and are borne by the ultimate buyer.
b) The exporter has made satisfactory arrangements for realization of full export proceeds subject to the usual EDF procedure.
(ii) AD Category – I banks may permit units in DTAs to purchase foreign exchange for making payment for goods supplied to them by units in SEZs. Authorised Dealer Banks are permitted to sell foreign exchange to a unit in the DTA for making payment in foreign exchange to a unit in the SEZ for the services rendered by it (i.e. a unit in SEZ) to a DTA unit. It must be ensured that in the Letter of Approval (LoA) issued to the
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ing extension beyond one year from the date of export, the total outstanding of the exporter does not exceed USD one million or 10 per cent of the average export realizations during the preceding three financial years, whichever is higher.
33
34e) In cases where the exporter has filed suits abroad against the buyer, extension may be granted irrespective of the amount involved / outstanding.
(ii) Cases which are not covered by the above instructions would require prior approval from the concerned Regional Office of the Reserve Bank.
(iii) Reporting should be done in EDPMS.
C.21 Shipments lost in transit
(i) When shipments from India for which payment has not been received either by negotiation of bills under letters of credit or otherwise are lost in transit, the AD Category – I banks must ensure that insurance claim is made as soon as the loss is known.
(ii) In cases where the claim is payable abroad, the AD Category – banks must arrange to collect the full amount of claim due o
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utstanding export dues despite best efforts, may either self-write off or approach the AD Category – I banks, who had handled the relevant shipping documents, with appropriate supporting documentary evidence. The limits prescribed for write-offs of unrealised export bills are as under:
Particulars
Limit
Limit(%) in relation to
Self-write-off by an exporter
(Other than the Status Holder Exporter)
5%
Total export proceeds realised during the calendar year preceding the year in which the write-off is being done
Self-write-off by Status Holder Exporter
10%
Write-off by AD Category-1 Bank
10%
C.23.2. The above limits of self-write-off and write-off by the AD Category-1 Bank shall be reckoned cumulatively and shall be available subject to the following conditions:
a) The relevant amount has remained outstanding for more than one year;
b) Satisfactory documentary evidence is furnished indicating that the exporter had made all efforts to realise the export proceeds;
c) The expo
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ll efforts made by the exporter;
* The cost of resorting to legal action would be disproportionate to the unrealised amount of the export bill or where the exporter even after winning the Court case against the overseas buyer could not execute the Court decree due to reasons beyond his control;
* Bills were drawn for the difference between the letter of credit value and actual export value or between the provisional and the actual freight charges but the amounts have remained unrealised consequent on dishonor of the bills by the overseas buyer and there are no prospects of realization.
C.23.3. Notwithstanding anything contained in para C.23.1 and C.23.2 above, the AD Category-1 bank may, on request of the exporter, write-off unrealised export bills without any limit in respect of cases falling under any of the categories specified at C.23.2 (d) (i), (ii) and (iii) above provided AD Category -1 bank is satisfied with the documentary evidence produced.
C.23.4. AD Category-1 banks m
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shall also indicate that the export benefits, if any, availed by the exporter have been surrendered.
C.23.7. The following cases, however, would not qualify for the “write-off” facility:
* Exports made to countries with externalization problem i.e. where the overseas buyer has deposited the value of export in local currency but the amount has not been allowed to be repatriated by the Central Bank/ authorities of the country concerned.
* EDF/Softex which are under investigation by agencies like, Enforcement Directorate, Directorate of Revenue Intelligence, Central Bureau of Investigation, etc. as also the outstanding bills which are subject matter of civil / criminal suit.
C.23.8. AD Category – 1 banks shall report write-off of export bills in Export Data Processing and Monitoring System (EDPMS).
C.23.9. AD banks shall put in place a system to carry out random check / percentage check of the export bills so written-off by their internal Inspectors/Auditors (including exter
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tion
As announced in the Foreign Trade Policy (FTP), 2015-20, realization of export proceeds shall not be insisted upon under any of the Export Promotion Schemes under the said FTP, subject to the following conditions:
a) The write off on the basis of merits is allowed by the Reserve Bank or by AD Category – I bank on behalf of the Reserve Bank, as per extant guidelines;
b) The exporter produces a certificate from the Foreign Mission of India concerned, about the fact of non-recovery of export proceeds from the buyer; and
c) This would not be applicable in self write off cases.
37C.26 Set-off of export receivables against import payables
C.26.1. AD category -I banks may deal with the following requests received from their Exporter/Importer constituents for allowing set-off of outstanding export receivables against outstanding import payables:
* Set-off of outstanding export receivables against outstanding import payables from/to the same overseas buyer/supplier.
* Set-off of
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bank shall ensure that import payables/export receivables are outstanding at the time of allowing set-off. Further, set-off shall be allowed between the export and import legs taking place during the same calendar year.
* In case of bilateral settlement, the set-off shall be in respect of same overseas buyer/supplier subject to it being supported by verifiable agreement/mutual consent.
In case of settlement within the group/associates companies, the arrangement shall be backed by a written, legally enforceable agreement/contract. AD Category – I bank shall ensure that the terms of agreement are strictly adhered to;
Set-off shall not result in tax evasion/avoidance by any of the entities involved in such arrangement.
* Third party guidelines shall be adhered to by the concerned entities, wherever applicable;
AD Category – I bank shall ensure compliance with all the regulatory requirement relating to the transactions;
AD Category – I bank may seek Auditors/CA certificate whe
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DF (O) forms / DTR as the case may be while details of import of goods / services are recorded through A1 / A2 form as the case may be. The relative EDF will be treated as complete by the designated AD Category – I banks only after the entire proceeds are adjusted / received.
(iii) Both the transactions of sale and purchase in R- Returns under FETERS are reported separately.
(iv) The export / import transactions with ACU countries are kept outside the arrangement.
(v) All the relevant documents are submitted to the concerned AD Category – I banks who should comply with all the regulatory requirements relating to the transactions.
C.28 Exporters' Caution List
381) An exporter would be caution-listed by the Reserve Bank based on the recommendations of the AD bank concerned, depending upon the exporters track record with the AD bank and investigative agencies.
The AD bank would make recommendations in this regard to the Regional Office concerned of the Foreign Exchange Department of
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having received advance payment or an irrevocable letter of credit in their favour covering the full value of the proposed exports;
* In case of usance bills, the relative letter of credit should cover full export value and also permit such drawings. Besides, the usance bills should also mature within prescribed realisation period reckoned from date of shipment.
* Except under the above mentioned conditions given in 2 (a) (i) and (ii), AD banks should not handle the shipping documents of caution listed exporters.
(b) AD Category – I banks should obtain prior approval of the Reserve Bank for issuing guarantees for caution-listed exporters.
C.29 [Omitted]39
C.30 Issuance of Electronic Bank Realisation Certificate (eBRC)
40AD Category-I banks are required to update the EDPMS with data of export proceeds on “as and when realised basis” and, with effect from October 16, 2017, they are required to generate Electronic Bank Realisation Certificate (eBRC) only from the data available in
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ndling these small-value export transactions, keeping in view the revised procedure/relaxations mentioned above and ensure that the same are commensurate with the services rendered. AD banks shall not levy any penal charges (penalty) for delays in adherence to any regulatory guidelines.
PART-D Remittances connected with Export
D.1 Agency commission on exports
(i) AD Category – I banks may allow payment of commission, either by remittance or by deduction from invoice value, on application submitted by the exporter. The remittance on agency commission may be allowed subject to conditions as under:
a) Amount of commission has been declared on EDF/SOFTEX form and accepted by the Customs authorities or Ministry of Information Technology, Government of India / EPZ authorities as the case may be. In cases where the commission has not been declared on EDF/SOFTEX form, remittance may be allowed after satisfying the reasons adduced by the exporter for not declaring commission on Export Decla
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Category – I banks, through whom the export proceeds were originally realised may consider requests for refund of export proceeds of goods exported from India and being re-imported into India on account of poor quality. While permitting such transactions, AD Category – I banks shall:
* Exercise due diligence regarding the track record of the exporter;
* Verify the bona-fides of the transactions;
* Obtain from the exporter a certificate issued by DGFT / Custom authorities that no export incentive has been availed by the exporter against the relevant export or the proportionate incentives availed, if any, have been surrendered;
* Not insist on the requirement of re-import of goods, where exported goods have been auctioned or destroyed by the Port / Customs / Health authorities/ any other accredited agency in the importing country subject to submission of satisfactory documentary evidence.
D.2.1. In all other cases AD banks shall ensure that procedures as applicable to normal im
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Returns
March 13, 2004
6
A.P. (DIR Series) Circular No.71
Data on Project Export Finance
June 8, 2007
7
A.P. (DIR Series) Circular No.30
Compilation of Bank-wide consolidated R-Return
February 25,2008
8
A.P (DIR Series) Circular No.43
Settlement system under ACU Mechanism
December 26, 2008
9
A.P. (DIR Series) Circular No.84
Compilation of R-Returns : Reporting under FETERS
February 29, 2012
10
A.P. (DIR Series) Circular No.46
Supply of Goods and Services by Special Economic Zones to Units in Domestic Tariff Areas
October 23, 2012
11
A.P. (DIR Series) Circular No.60
Export Outstanding Statement (XOS) Online Bank wide Submission
October 01, 2013
12
A.P. (DIR Series) Circular No.62
Closing of Old Outstanding Bills : Export – Follow-up – XOS Statements
October 14, 2013
13
A.P. (DIR Series) Circular No.63
Memorandum of Procedure for Channeling Transactions through Asian Clearing Union (ACU)
October 18, 2013
14
A.P.(DIR Series) Circular No.146
Export & Imp
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Series) Circular No. 10
Re-export of unsold rough diamonds from Special Notified Zone of Customs without Export Declaration Form (EDF) formality
November 22, 2019
22
A.P. (DIR Series) Circular No. 22
Settlement system under Asian Clearing Union (ACU) Mechanism
March 17, 2020
23
A.P. (DIR Series) Circular No. 27
Export of Goods and Services- Realisation and Repatriation of Export Proceeds-Relaxation
April 01, 2020
24
A.P. (DIR Series) Circular No. 03
Export Data Processing and Monitoring System (EDPMS) Module for 'Caution/De-caution Listing of Exporters' – Review
October 09, 2020
25
A.P. (DIR Series) Circular No. 08
External Trade – Facilitation – Export of Goods and Services
December 04, 2020
26
A.P. (DIR Series) Circular No. 13
Use of any Alternative reference rate in place of LIBOR for interest payable in respect of export / import transactions
September 28, 2021
27
A.P. (DIR Series) Circular No. 09
Asian Clearing Union (ACU) Mechanism – Indo-Sri Lanka trade
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ification No. FEMA 10(R)(7)/2025-RB
Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) (Seventh Amendment) Regulations, 2025
October 06, 2025
36
A.P (DIR Series) Circular No. 19
Foreign Exchange Management (Guarantee) Regulations, 2026
January 12, 2026
–
1 FEM (Export of Goods and Services) Regulations, 2000 was repealed and replaced by FEM (Export of Goods and Services) Regulations, 2015 with effect from January 12, 2016.
2 FEM (Export of Goods and Services) Regulations, 2000 was repealed and replaced by FEM (Export of Goods and Services) Regulations, 2015 with effect from January 12, 2016.
3 Substituted vide A.P. (DIR Series) Circular No. 19 dated January 12, 2026. Prior to substitution, Para A.1(iv) read as follows:
“(iv) In terms of Regulation 4 of the Foreign Exchange Management (Guarantees) Regulations, 2000, notified vide Notification No. FEMA 8/2000-RB dated May 3, 2000, AD Category – I banks have been permitted to issue guarantees
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ncy Accounts by a person Resident in India) Regulations, 2015 with effect from January 21, 2016. Prior to insertion it read as “Regulation 7(7) of the Foreign Exchange Management (Foreign Currency Accounts by a person Resident in India) Regulations, 2000 notified vide Notification No. FEMA 10/2000-RB dated May 3, 2000”
18 Inserted by FEM (Foreign Currency Accounts by a person Resident in India) Regulations, 2015 with effect from January 21, 2016. Prior to insertion it read as “Regulation 7 of Notification No. FEMA 10/2000-RB dated May 3, 2000”
19 Inserted by FEM (Foreign Currency Accounts by a person Resident in India) Regulations, 2015 with effect from January 21, 2016. Prior to insertion it read as “Regulation 6 (A) of Notification No. FEMA 10/2000-RB dated May 3, 2000”
20 Substituted vide Notification No. FEMA 10(R)(7)/2025-RB dated October 06, 2025. Prior to substitution it read as 'A person resident in India, being an exporter, may open, hold and maintain a Foreign Currency Acc
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ulations, 2015 with effect from January 21, 2016
23 Inserted by FEM (Foreign Currency Accounts by a person Resident in India) Regulations, 2015 with effect from January 21, 2016. Prior to insertion it read as “Regulation 4 of the Foreign Exchange Management (Foreign Currency Accounts by a person Resident in India) Regulations, 2000 notified vide Notification No. FEMA 10/2000-RB dated May 3, 2000″
24 FEM (Export of Goods and Services) Regulations, 2000 was repealed and replaced by FEM (Export of Goods and Services) Regulations, 2015 with effect from January 12, 2016
25 Inserted vide Gazette Notification No. 28.2015-2020 dated August 27, 2018. Prior to deletion it read as:” AD Category – I banks may consider requests for grant of EDF waiver from exporters as under: Status holders shall be entitled to export freely exportable items (excluding Gems and Jewellery, Articles of Gold and precious metals) on free of cost basis for export promotion subject to an annual limit of Rupees One Cro
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2016
29 Substituted vide Notification No. FEMA 23 (R)(7)/2025-RB dated November 13, 2025
30 Inserted vide AP(DIR Series) Circular No.10 dated November 22, 2019
31 Inserted vide AP(DIR Series) Circular No.08 dated December 04, 2020
32 Inserted by AP (Dir) Series Circular 74 dated May 26, 2016, to be effected from June 15, 2016. Prior to insertion it read as: “With operationalisation of EDPMS on March 01, 2014, realization of all export transaction for shipping documents after February 28, 2014 should be reported in EDPMS and old outstanding shipping bills prior to March 01, 2014 should continue to be reported in XOS till completion of the cycle.”
33 Omitted by AP (DIR) Series Circular 74 dated May 26, 2016 with effect from June 15, 2016. Prior to deletion it read as: “All the export bills outstanding beyond six months from the date of export may be reported in XOS statement. However, where extension of time has been granted by the AD Category – I banks, the date up to which extensi
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o years in EDPMS provided no extension is granted by AD Category -I bank / RBI. Date of shipment will be considered for reckoning the realisation period. (b) Once related bills are realised and closed or extension for realisation is granted, the exporter will automatically be de-caution listed. (c) The exporters can also be caution listed even before the expiry of two years period based on the recommendation of AD banks. The recommendation may be based on cases where exporter has come to adverse notice of the Enforcement Directorate (ED)/ Central Bureau of Investigation (CBI)/ Directorate of Revenue Intelligence (DRI)/ any such other law enforcement agency or the case where exporter is not traceable or not making any serious efforts for realisation of export proceeds. In such cases, AD may forward its findings to the concerned regional office of RBI recommending inclusion of the name of the exporter in the caution list. (d) Reserve Bank will caution / de-caution the exporters in such c
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