Old FEMA vs New FEMA 2026: Key Export-Import Regulations Effective from 1 October 2026 Part 4

Foreign Exchange Management Act (FEMA) plays an important role in regulating India’s foreign exchange transactions, including export proceeds, import payments, software exports, and international trade compliance.

The Reserve Bank of India (RBI) has introduced the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, which are scheduled to come into force on 1 October 2026.

These regulations introduce a consolidated framework for export and import transactions. Exporters, importers, and finance teams should understand the relevant changes and review their compliance procedures.

Set-Off and Write-Off of Export Proceeds

The new framework provides provisions for reduction in export realisation and set-off of export receivables against import payables.

An AD bank may allow eligible adjustments after reviewing the exporter’s request, reasons, and applicable requirements.

Businesses should retain supporting documentation for any reduction, non-realisation, or set-off transaction.

Set-Off and Write-Off of Export Proceeds under New FEMA Regulations 2026, featuring export realisation reduction, export receivables set-off, AD bank approval, and supporting documentation. DGFT EXIM Consultants provides export compliance guidance.

Advance Payments and AD Bank Role

The Authorised Dealer (AD) bank has an important role in monitoring and processing international trade payments.

The new regulations address:

Advance receipts for exports.
Advance payments for imports.
Monitoring of export and import transactions.
Internal banking policies and standard operating procedures.

Exporters and importers should coordinate with their AD bank to understand documentation requirements, payment conditions, and applicable approvals.

Advance Payments and AD Bank Role under New FEMA Regulations 2026, highlighting advance receipts for exports, advance payments for imports, transaction monitoring, and banking policies. DGFT EXIM Consultants provides export-import compliance guidance and AD bank coordination support.

Merchanting Trade Transactions

Merchanting Trade Transactions (MTT) involve the purchase and sale of goods between overseas parties without the goods necessarily entering India.

Under the new regulations, the period between the outward and inward remittances generally must not exceed six months, subject to permitted extensions.

Businesses involved in merchanting trade should review the applicable payment timelines and documentation requirements.

Merchanting Trade Transactions (MTT) under New FEMA Regulations 2026, explaining overseas purchase and sale of goods, payment timelines, permitted extensions by AD banks, and key compliance requirements. The infographic highlights global trade opportunities, compliant payments, and DGFT EXIM Consultants’ trade compliance services.

Key Compliance Checklist for Exporters and Importers

Businesses should consider the following steps before the new regulations take effect:

Review export proceeds realisation timelines.
Check outstanding EDPMS and IDPMS entries.
Verify the required export declaration and reporting process.
Coordinate with the AD bank regarding payment and extension procedures.
Update internal SOPs and compliance documentation.
Maintain records of invoices, shipping bills, remittances, and supporting documents.

Stay updated with FEMA, RBI, DGFT, and EXIM compliance requirements.

Professional Assistance

DGFT EXIM Consultants provides professional consultancy support for DGFT, EXIM, import-export compliance, and trade documentation.