RBI's FEMA 2026 Export–Import Regulations Take Effect 1 October 2026 — What Every Exporter and Importer Must Prepare For

From 1 October 2026, the Reserve Bank of India's Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 — together with the accompanying Directions — replace the foreign-exchange rulebook that Indian traders have used for a decade. If you export or import goods, services or software, the way you declare shipments, realise proceeds, pay overseas suppliers, set off receivables and run merchanting trades is being rewritten. This is not a rate change or a single notification; it is a wholesale reset of the FEMA trade framework, and your bank's internal policy will now decide many things the RBI used to decide centrally.

What Happened

The RBI notified the new Regulations on 13 January 2026 and issued the related Directions on 16 January 2026, after two rounds of stakeholder consultation on draft versions floated in July 2024 and April 2025. Both come into force on 1 October 2026. On that date the earlier Foreign Exchange Management (Export of Goods & Services) Regulations, 2015, the Master Direction on Export of Goods and Services, the Master Direction on Import of Goods and Services, the Memorandum on Project and Service Exports (PEM), 2014, the Merchanting Trade Guidelines, 2020, and a list of 167 circulars all stand superseded.

The headline changes for traders are:

• Export realisation timeline. Export proceeds must be realised within 15 months — from the date of shipment for goods, and from the date of invoice for services and software. Where the export is invoiced and/or settled in Indian Rupees, the window is 18 months. Warehouse exports are realised within 15 months from the date of sale from the overseas warehouse, and project exports follow the contract. (The 15-month period was already introduced via Notification No. FEMA 23(R)/(7)/2025-RB dated 13 November 2025 and is retained here.)
• Import payment timeline. No longer a flat six months. The timeline follows the underlying contract between the importer and the overseas seller, with AD banks empowered to grant extensions under their own internal policy and SOP.
• A single, time-bound reporting form. All exporters file an Export Declaration Form (EDF); for goods through EDI ports the shipping bill is deemed to be the EDF. Crucially, exporters of services and software must now file an EDF within 30 days of month-end — a new reporting obligation.
• Set-off liberalised. Export receivables can be set off against import payables with the same overseas party or its group companies, and — for the first time — goods receivables can be offset against services payables and vice versa. The same-calendar-year and written-agreement conditions are removed.
• Merchanting trade eased. The mandatory profitability test, the nine-month outer limit and the bar on agency commission are dropped; only the six-month outlay window between remittances remains (extendable by the AD bank).
• Caution listing dropped. The formal RBI caution-listing mechanism is removed. Instead, an exporter whose receivables stay unpaid beyond a year (including extensions) may export further only against full advance or a confirmed irrevocable letter of credit.
• Small-value relief. For shipments up to ₹10 lakh per shipping bill/invoice, EDPMS/IDPMS entries can be reconciled and closed on the trader's own declaration, submitted quarterly in bulk.

Why It Matters

The reform's thrust is to move India from a rules-heavy, RBI-permission model to a bank-discretion, contract-led model. AD banks must now publish detailed internal policies and SOPs, delegate approval powers, run a grievance-escalation mechanism, and keep charges reasonable. For traders that means faster decisions in principle — but also that two banks may treat the same transaction differently, so where you bank starts to matter more.

Who's Affected

Every Indian exporter and importer of goods, services or software; service and software exporters in particular gain a new EDF reporting duty. Status holders, SEZ units and EOUs are covered by the same realisation timelines. Merchanting traders, project exporters and businesses running overseas warehouse (fulfilment) models see the biggest structural change. Bullion and jewellery importers should note that AD banks may not permit advance remittance for import of gold and silver unless specifically allowed under FEMA.

What Exporters, Importers and CHAs Should Do Now

• Map your open entries. Reconcile all open items in EDPMS (exports) and IDPMS (imports) before 1 October and close what you can under the current rules.
• Re-read your contracts. Because import payment timelines now follow the contract, put explicit payment-period clauses into purchase agreements with overseas sellers.
• Talk to your AD bank early. Ask for its new internal policy/SOP, its extension and set-off stance, and its position on write-offs — these now vary by bank.
• Set up services/software EDF filing. If you export services or software, build a monthly process to file the EDF within 30 days of month-end.
• Review advance-payment and MTT structures against the new thresholds and the removal of the profitability and timeline caps.
• Do not assume self-write-off. The self-write-off option for export receivables has been withdrawn; plan for AD-bank-led closure instead.

The Bigger Picture

The 2026 Update is one of the most significant liberalisations of India's cross-border payment framework in years, and it lands alongside the RoDTEP sunset and the 57th GST Council's refund agenda. Read together, the direction of travel is clear: less central permission, more digital verification, and more responsibility pushed to AD banks and to traders' own documentation. The trade-off is potential inconsistency between banks until practices settle, and several edge cases — operating-lease exports, free-of-cost imports, ACU-country and OFAC-sanctioned trade, and legacy transactions — remain unaddressed and will need clarification.

Frequently Asked Questions

Is the export realisation period changing on 1 October 2026? The 15-month period itself was already in effect from the November 2025 notification and is carried forward. What changes on 1 October is the surrounding framework — reporting, set-off, MTT, caution listing and AD-bank discretion.

Do I need to file anything new if I only export software? Yes. Software (and other services) exporters must file an EDF within 30 days of the end of the month in which the invoice was raised — a reporting obligation that did not exist before.

Will my import payment still be capped at six months? No. The import payment timeline now follows your underlying contract, with your AD bank able to grant extensions under its own policy.

Does this affect my duty scheme benefits (RoDTEP, drawback)? The new Regulations do not carry the earlier provision requiring proportionate surrender of export incentives on non-realisation; those consequences will instead be governed by the respective scheme statutes and policies.

Conclusion

Treat 1 October 2026 as a hard planning date. Clean up your EDPMS/IDPMS entries, get your AD bank's new policy in writing, and update your export and import contracts before the switchover — because from that day the old Master Directions and 167 circulars no longer apply.

This summary is for general guidance only. Confirm all requirements against the official Regulations and Directions on the Reserve Bank of India portal (rbi.org.in) and with your AD bank before acting.