FEMA Export and Import Regulations 2026: What Changes from 1 October, Before and After
Edited by Siddharth S. Sancheti, Chartered Accountant
In brief: From 1 October 2026 the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 replace the 2015 export regulations and the separate import rules. Goods, services and software now sit under one framework with a common export declaration mechanism (the Export Declaration Form or EDF) and reporting in both EDPMS and IDPMS. The biggest shifts are the EDF for service exporters, a 9 month realisation period (12 months for Rupee exports) after the RBI amendment of 22 September 2026, wider powers for Authorised Dealer (AD) banks and the end of exporter-level caution listing. This article sets out what the position was before and what it is now.
Let’s start with the big picture
Think of the old system as two rulebooks. One for exports (the 2015 Regulations backed by the Master Direction on exports) and one for imports (mostly Master Direction and Directions). Goods exporters filed the EDF. Software exporters filed SOFTEX. Service exporters largely filed nothing. IDPMS reporting was primarily built around imports of goods.
The 2026 Regulations replace that with one consolidated rulebook. In simple terms the RBI has moved from prescribing rules for every situation to prescribing a framework and asking banks to run it under their own policy and SOP. That is why so many rows below say “AD may allow”. The bank’s discretion has grown. So has the need to know your bank’s SOP.
- Principal Regulations: Notification No. FEMA 23(R)/2026-RB dated 13 January 2026.
- Amendment: Notification No. FEMA 23(R)/(1)/2026-RB dated 22 September 2026.
- Effective date: 1 October 2026.
- Instructions to banks: A.P. (DIR Series) Circular No. 20 dated 16 January 2026.
How to read the tables
The “After” column is checked against the text of the Regulations as amended up to 22 September 2026. The “Before” column reflects the 2015 framework. Rows marked † rely on a bank’s published summary of the changes for the “Before” position or for details that the Regulations do not spell out. Please confirm those with your AD bank or the RBI Directions before relying on them.
Exports: before and after
| Topic | Before | After (2026 Regulations) | Regulation |
|---|---|---|---|
| EDF for services | No EDF for services. SOFTEX for software. No EDPMS reporting for services | EDF for services within 30 days from the end of the month in which the invoice is raised. One EDF can cover all service exports of the month. Non-software services can file on or before the date of receipt of payment. AD may extend the period | 3(2) |
| Specified authority for services | Not applicable | AD bank for services other than software. AD bank or STPI for software. Development Commissioner for SEZ units | 2(1)(f) |
| Software | SOFTEX | Treated as a service. Same EDF | 2(1) Explanation |
| Realisation of goods | 9 months from shipment | 9 months from shipment | 5(1)(a) |
| Realisation of services | 9 months from export† but with no EDF or EDPMS trail for services | 9 months from the date of invoice | 5(1)(a) |
| Realisation for warehouse exports | 15 months from shipment† | 9 months from the date of sale of goods from the overseas warehouse | 5(1)(b) |
| Rupee invoiced or settled exports | No specific period† | 12 months (from shipment or invoice or warehouse sale as applicable) | 5(1) proviso |
| Project exports | 9 months† | As per payment terms of the contract | 5(1)(c) |
| Extension of realisation | Allowed only if overdue exports stay within USD 1 million or 10% of realisations† | AD may extend on a request with reasons if it is satisfied. No cap appears in the Regulations | 5(1) second proviso |
| Reduction or non-realisation | Reduction up to 25% with higher limits for exporters with a three year track record† | AD may allow reduction on request. Up to Rs 10 lakh per shipping bill or invoice on the exporter’s declaration | 6 |
| Closure of EDPMS entries | On evidence of realisation† | Up to Rs 10 lakh per shipping bill or invoice on the exporter’s declaration. Quarterly bulk declaration allowed | 4(2) |
| Set-off | Goods exports against services imports and the reverse not allowed†. Both legs within the same calendar year† | AD may allow set-off against the same overseas buyer or supplier or its group or associate companies within the realisation period. No calendar year condition appears in the Regulations | 7 |
| Third party receipts | Third party details required in shipping bill and invoice† | AD may permit if satisfied about bona fides | 8 |
| Export advances | Goods to be exported within three years of the advance. Refund after three years needs RBI approval. Long-term advances up to ten years for exporters with a three year track record | The Regulations prescribe no three year limit. Advance terms follow the contract and the bank’s policy. Advance and export proceeds go through the same AD unless both ADs are informed of a change. Interest stays within the trade credit all-in-cost ceiling | 10(1) and 10(4) |
| Project export surplus | Short-term deposits up to one year† | Short-term instruments (maturity one year or less) including treasury bills and bank deposits outside India | 15(2) |
| Caution listing | RBI could caution-list exporters on AD recommendations. Listed exporters could export only against full advance or an irrevocable LC | Caution listing provisions are omitted. Exporters on the Caution List on 30 September 2026 remain under the existing order until removed | 13 proviso |
| Unrealised exports | Linked to caution listing | If proceeds stay unrealised for more than one year beyond the due date or extended date the exporter can export further only against full advance or an irrevocable LC | 13 |
Imports and merchanting: before and after
| Topic | Before | After (2026 Regulations) | Regulation |
|---|---|---|---|
| IDPMS reporting | Primarily imports of goods | Imports of goods and services and merchanting trade. AD enters service imports as declared by the importer within five working days | 18(1)(c) to (e) |
| Time to pay for imports | 6 months from shipment with extensions in stages | As per the underlying contract. AD may extend on a request with reasons | 9 |
| Advance remittance | FBG waiver with AD up to USD 5 million† | AD permits after satisfying itself of genuineness. AD may set thresholds beyond which a standby LC or guarantee is needed | 10(3) |
| Fresh advance when an earlier advance is pending | Monitored through follow-up† | Future advances need an unconditional irrevocable standby LC or guarantee until the earlier advance is repatriated or the IDPMS entry is marked off | 12(2) |
| Small value imports | Closure up to Rs 10 lakh on importer declaration (Master Direction update) | Up to Rs 10 lakh per bill of entry or invoice on the importer’s declaration. Quarterly bulk declaration allowed | 4(2) second proviso |
| Closure at a reduced value | Write-off up to about 5% on conditions† | AD may close the IDPMS entry on request where the import was settled at a reduced value and it is satisfied about the reasons | 18(1)(k) |
| Merchanting trade completion | Nine months overall with a six month foreign exchange outlay limit | Maximum gap between the outward and inward remittance is six months. AD may extend | 16(1)(a) |
| Third party in merchanting | Not permitted | AD may permit if it is satisfied about the reasons | 16(1)(b) |
| Gold and silver | 90 day credit period limit on imports of gold | No advance remittance for import of gold or silver | 11 |
Three changes that matter most
1. Service exporters now have a monthly EDF. This is the change that reaches the most clients. Freelancers who qualify as service exporters (along with consultants, agencies and IT service providers) file one EDF a month with the specified authority. For most of them that is the AD bank. The bank enters it in EDPMS within five working days. For a deeper read see our earlier explainer on the EDF for service exporters.
2. The realisation clock is shorter. The original January 2026 text carried 15 months and 18 months. The September amendment cut this to 9 and 12 months. For warehouse exports the earlier 15 month period is now 9 months from the sale date. For services the period runs from the invoice date. Extensions remain available from the AD on a request with reasons.
3. Caution listing gives way to a rule on unrealised exports. There is no new exporter-level caution listing. Instead Regulation 13 restricts further exports to full advance or an irrevocable LC once proceeds stay unrealised beyond one year past the due date or the extended date. Those already on the Caution List on 30 September 2026 stay under the old order until removed.
A quick example
An exporter ships goods on 15 October 2026 to an overseas buyer.
| Item | Date |
|---|---|
| Realisation due (9 months) | 15 July 2027 |
| Realisation due if invoiced or settled in Rupees (12 months) | 15 October 2027 |
| Regulation 13 restriction if still unrealised (one year beyond the due date) | After 15 July 2028 |
For goods sold from an overseas warehouse on 20 November 2026 the nine months run from the sale date. That gives 20 August 2027. If a service invoice is raised on 15 October 2026 the EDF is due by 30 November 2026.
Dates verified by calculation.
What it means for you
| Who | Impact | What to do |
|---|---|---|
| Service exporters (including freelancers who qualify as such) | New monthly EDF. Realisation tracking from the invoice date | Start a monthly EDF routine from the first October 2026 invoice. Keep a realisation register |
| Goods exporters | Same nine month rule for shipments. Shorter period for warehouse exports. Wider room for reduction/non-realisation up to Rs 10 lakh on declaration | Review warehouse export contracts. Check your bank’s SOP on extensions |
| Exporters on the Caution List | Continue under the existing order until removed | Ask your AD about the removal process |
| Importers | Service imports now in IDPMS. Payment period follows the contract | Align contract payment terms with your cash plans. Expect IDPMS entries for services |
| Importers paying advances | Fresh advances need an SBLC or guarantee if an earlier advance is pending | Clear old advances before making new ones |
| Merchanting traders | Six month gap between remittances. Third party payments possible with bank approval | Document the commercial reasons for any third party |
| AD banks | Required to maintain and publish their policy and SOP | Publish the SOP before 1 October |
Points to confirm with your bank
A bank’s summary of the changes lists several points that the Regulations themselves do not spell out. We have not treated them as settled. Please check each one against the RBI Directions or with your AD bank.
- PAN being mandatory for EDF and IDPMS reporting.
- EDF for all exports including free of cost consignments and samples. One law firm summary notes that goods exported without consideration are reported at nil value.
- Buyer-specific restriction. The bank summary says the restriction after one year of unrealised proceeds applies only to the buyer concerned. Regulation 13 speaks of “the exporter” undertaking further exports. Confirm how your bank applies it.
- Receipt in a currency different from the invoice currency.
- Evidence of import for services.
- Direct dispatch of export documents without status holder conditions.
- Bharat Mart warehouse period. The Regulations refer only to a warehouse outside India.
- Doubtful transaction reporting extended to imports.
Your questions answered
When do the 2026 Regulations take effect?
On 1 October 2026 (Regulation 1(2)). They replace the 2015 export regulations except for things done before supersession.
What about export transactions before 1 October 2026?
Regulation 20 authorises AD banks to handle pre-October 2026 export and import and merchanting matters that earlier needed RBI approval.
Is the realisation period 15 months?
No. The 22 September 2026 amendment substituted 9 months for 15 months and 12 months for 18 months.
Do I need to file an EDF if I export services below Rs 10 lakh?
Yes. The Rs 10 lakh limit relates to closure and reduction of entries on the exporter’s declaration. It is not an exemption from filing.
Can I set off an export receivable against an import payable?
Yes with the same overseas buyer or supplier or its group or associate companies and within the realisation period or the extended period.
Who decides on extensions?
The AD bank on a request that cites reasons. Approach it before the period ends.
Can the bank charge me for a regulatory delay?
No. Regulation 19(3) bars the bank from levying any charge or penalty on you for a regulatory delay or violation by you. Its charges for handling transactions must be reasonable.
What is the penalty for contravention?
Section 13 of FEMA 1999 provides a penalty up to three times the sum involved where quantifiable and up to Rs 2 lakh where it is not. A further Rs 5,000 a day applies while the contravention continues.
Your action checklist
- Get your AD bank’s export and import SOP.
- Map every foreign receipt and payment to the new rules.
- Set up the monthly EDF for service exports.
- Diarise the 9 or 12 month realisation date for each invoice.
- Review contract terms for import payments and advance payments.
- Clear pending advance payments before fresh ones.
- Ask your bank about the open points listed above.
Sources
Primary
- RBI: FEMA 23(R)/2026-RB, amended up to 22 September 2026
- RBI: FEMA 23(R)/(1)/2026-RB dated 22 September 2026
- RBI A.P. (DIR Series) Circular No. 20 dated 16 January 2026 (Directions to Authorised Dealers accompanying the Regulations)
- RBI: Master Direction on Export of Goods and Services (earlier framework)
Secondary
- EY: RBI issues EXIM Guidelines
- LKS: RBI releases FEMA 2026 Export-Import Trade Regulations
- A bank’s published comparison of key changes under the FEMA 2026 Regulations (PDF dated 29 September 2026)
This article is for general information and is not advice on specific facts. Rows marked † and the points to confirm rely on a bank’s summary and should be checked with your AD bank.
Finoscape | Editor: Siddharth S. Sancheti