India Simplifies Export & Import Rules: Key Highlights of FEMA 2026 Regulations

Published Wed, 11 Feb 2026 | Updated Wed, 11 Feb 2026 FEMA

India has made a significant move toward making cross-border trade easier by introducing Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, notified by Reserve Bank of India.

These newly introduced regulations replace the prior ones proposed under the 2015 regulations and are aimed at making business with India not only easier but also faster and more transparent for foreign companies and service providers.

The regulations will be effective on October 1, 2026.

Key Highlights of the New FEMA 2026 Trade Regulations

1. One Unified Framework for Goods and Services

For the first time, RBI has issued a single consolidated regulation covering both exports and imports of goods and services, including software.

This brings us to:

• Better Regulatory Clarity
• Uniform compliance standards
• Easier interpretation to foreign companies entering India

2. Simplified Export Declarations

a)  Goods exporters can consider the Export Declaration Form (EDF) part of the electronic shipping bill in EDI ports.

b)  Service exporters now have a clear timeline: EDF to be filed within 30 days from the end of the month of invoicing provided that

• (i)Multiple service exports in a month could be covered under a single EDF for all such exports.
• (ii) exporter of services other than software, may submit an EDF on or before the date of receipt of payment.

This significantly reduces paperwork for global service providers and IT companies.

3. Longer Time for Realisation of Export Proceeds

(a) Exporters now get up to 15 months to realise and repatriate export proceeds:

• From shipment date in case of goods (other than goods exported to a warehouse outside India)
• From the date of invoice in case of services

(b) As per payment terms of the contract, in case of project exports:

(c) If exports are invoiced or settled in Indian Rupees (INR), the time limit is extended to 18 months from the date of shipment in case of goods (other than goods exported to a warehouse outside India), from the date of invoice in case of services, and from the date of sale of goods in case of goods exported to a warehouse outside India

This longer time limit offers cash flow flexibility, especially for long-cycle international contracts.

4. Easier Compliance for Small-Value Transactions

For Exports / Imports up to ₹10 Lakh per Invoice:

• Banks may close export/import records based merely on a simple declaration from exporter/importer
• Quarterly bulk closure is also permissible

This is a big relief for startups, SMEs, and first-time foreign traders who deal with India.

5. Export realization reduction.

• Banks can allow under-realisation or non-realisation of export proceeds after justification found genuine.
• Reduction of Exports of value up to ₹10 lakh can be permitted based on a simple declaration by the exporter.

6. Flexible Set-Off of Export and Import Dues

Businesses can now:

• Set-off export receipts with import payables
• Even with overseas group or associate companies

This facilitates the efficient management of treasury operations by the multinational group.

7. Third-Party Payments Permitted

The regulations have introduced the possibility of third-party receipts and payments of exports and imports, which would be verified through the banks.

This is especially useful for:

• Global supply chains
• Group companies
• Structured international trade arrangements

8. Clear Rules for Advance Payments

• Advance payments for exports and imports are permitted.
• Transactions through the same Authorised Dealer, with the flexibility to change the Authorised Dealer after intimating to both the Authorised Dealers.
• Interest on advances or delays is regulated by existing norms for trade credits

This ensures commercial freedom with regulatory safeguards.

9. Support for Merchanting Trade

Merchanting Trade Transactions (buying and selling goods overseas without goods entering India) are clearly regulated:

• Merchandising trade has to be completed within six months; however, this period can be extended by banks on request.
• The supporting documents have to be submitted to the bank for verification of genuineness of the transaction.
• Payments and receipts should flow directly between the overseas buyer and seller, though third-party payments may be permitted with bank approval.

This makes India more attractive for global trading and sourcing businesses.

10. Boost to International Trade Invoicing and Settlement in Indian Rupees (INR).

These rules are in line with the trend towards facilitating international trade invoicing and settlement in Indian Rupees (INR).

This benefits foreign partners by:

• Reducing forex volatility
• Simplification of settlement
• Strengthening the India trade relationship

11. Stronger, Transparent Banking Processes

Authorized Dealer (AD) banks must now:

• Publish clear SOPs and policies
• Define timelines, documentation, and charges
• Maintain grievance redressal and escalation processes

This creates predictability and trust for foreign clients who deal with Indian banks.

What This Means for Foreign Companies

The new Import and Export 2026 Regulations are a strong signal that India is ‘open for business’ with:

• Easier Market Entry
• Faster compliance
• Reduced operational friction
• Global-friendly trade practices

Whether you are

• A foreign company exporting services to India
• A global manufacturer who imports from India
• A software or IT services provider
• A global organization that oversees international trade

The Indian regulatory environment is now simpler, clearer, and closer to global best practices.

How Companies Next Helps

At CompaniesNext, we help foreign businesses with:

• Setting up of their business in India
• FEMA & RBI compliance
• Export-import structuring
• Banking & regulatory advisory
• Ongoing compliance support
• Tax Advisory
• Valuation Services

📩 Looking to expand into India or trade with Indian companies?

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