The Reserve Bank of India (RBI) has unveiled draft guidelines aimed at simplifying export and import regulations under the Foreign Exchange Management Act (FEMA), inviting public feedback until September 1, 2024.
These guidelines are part of the Statement on Developmental and Regulatory Policies released in June 2024 and are designed to facilitate ease of business, particularly for small exporters and importers.
The RBI has requested stakeholders to email their comments on the draft regulations and directions by September 1, 2024, with the subject “Feedback on FEMA export and import drafts.”
Streamlining Procedures for Exporters and Importers
Under the proposed guidelines, exporters are required to provide a declaration specifying the full export value of goods or services. This declaration, along with relevant documents, must be submitted to the Authorised Dealer (AD) bank within 21 calendar days from the date of shipment for goods or from the date of invoice for services.
The regulations also stipulate that payments for exports must be received as per the Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2023. Full export value must be realised and repatriated within nine months from the date of shipment or invoice, with provisions for extensions under certain conditions.
Empowering Authorised Dealer Banks
The new guidelines empower AD banks to provide quicker and more efficient services to their foreign exchange customers. They include provisions for accepting export documents beyond the initial 21-day period under specific conditions and permitting reductions in export value as per RBI guidelines. Additionally, AD banks may extend the specified period for the receipt of payments for export, given reasonable and sufficient cause.
Advance Payments and Project Exports
The draft regulations also address the handling of advance payments for exports, outlining the conditions under which these must be refunded if export obligations are not met. For project exports on deferred payment terms or those involving turnkey projects, prior approval from AD banks is required.
Caution-Listing of Exporters
Exporters who fail to realise the full export value within the specified period may be caution-listed by AD banks. These exporters will need to operate under stricter conditions until compliance is achieved, ensuring adherence to the guidelines.
Announced as part of the Statement on Developmental and Regulatory Policies in June 2024, these proposed changes aim to further liberalise the regulatory framework governing export and import transactions.
