Regulations 1 to 8 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
These Regulations, in force from October 01, 2026, govern exports and imports of goods and services together. Regulations 1 to 8 and 13 cover the export side: the declaration an exporter files, how money must come in, the time to realise export proceeds, reduction in the value realised, set-off against imports, third-party payments, and what happens when export proceeds stay unrealised.
This is the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (Notification No. FEMA 23(R)/2026-RB, January 13, 2026), as per the text on the Reserve Bank's site, amended up to September 22, 2026. They come into force from October 01, 2026 and supersede the Export of Goods & Services Regulations, 2015. Full export value must be realised and repatriated within nine months from the date of shipment (goods) or invoice (services), or twelve months where the export is invoiced or settled in Indian Rupees. An authorised dealer may extend the period or allow reduction of the export value on reasons. If proceeds stay unrealised for more than one year beyond the due date, further exports need full advance or an irrevocable Letter of Credit.
Authority and status
The preamble cites "Section 7, Section 8, sub-section (6) of Section 10 and sub-section (2) of Section 47" of the Foreign Exchange Management Act, 1999. See the Act articles on section 7 and the Manner of Receipt rules, section 8 on realisation and repatriation, section 10 on authorised persons and sections 47 and 48. Regulation 1(2) brings the Regulations into force from October 01, 2026. They were amended by Notification No. FEMA 23(R)/(1)/2026-RB dated September 22, 2026, which substituted the realisation periods in regulation 5(1) and inserted a proviso to regulation 13, as the footnotes record. Later amendments and circulars should be checked. For advice on export compliance, see our FEMA advisory service.
Regulation 2: defined terms
Regulation 2 defines the Export Declaration Form (EDF) as the form given at the Annex (the Annex is not on the Reserve Bank page consulted, so its fields are not described). "Software" means any computer programme, database, drawing, design, audio or video signals, or any information in or on any medium other than a physical medium, and "services" include software. The "specified authority" is:
| For | Specified authority |
|---|---|
| Goods | Commissioner of Customs in the Domestic Tariff Area; Development Commissioner of the Special Economic Zone in an SEZ |
| Services other than software | An Authorised Dealer in the DTA; Development Commissioner of the SEZ |
| Software | An Authorised Dealer or Software Technology Parks of India in the DTA; Development Commissioner of the SEZ |
Regulation 3: declaration of exports
- Goods. The exporter furnishes an EDF to the specified authority, giving the amount representing the full export value of goods, at the time of export. For goods exported through an EDI port the EDF is deemed submitted as part of the shipping bill. A traveller moving personal effects, accompanied or unaccompanied, is not treated as an exporter.
- Services. The exporter furnishes an EDF specifying the full export value within 30 days from the end of the month in which the invoice was raised. An exporter of services to several recipients in a month may submit a single EDF; an exporter of services other than software may submit it on or before the date of receipt of payment; and the Authorised Dealer may extend the period on a request citing reasons for delay, after satisfying itself of their reasonableness.
- Non-EDI port, or a specified authority other than an Authorised Dealer. The duly authenticated EDF is forwarded by the specified authority to the respective Authorised Dealer.
Regulation 4: manner of receipt and payment
Receipts and payments are in the manner specified in the Manner of Receipt and Payment Regulations, 2023, as amended; those Regulations are not in the sources consulted. An Authorised Dealer credits or debits an exporter's or importer's account only after being satisfied of the genuineness of the transaction, and simultaneously closes or updates the entry in the Export Data Processing and Monitoring System (EDPMS) or the Import Data Processing and Monitoring System (IDPMS). For a shipping bill or invoice up to ₹10 lakh (or its foreign currency equivalent), the entry may be closed on the exporter's declaration that payment has been realised in full or otherwise, and the declaration may be given quarterly for bulk closure.
Regulation 5: time for realisation
| Case | Period under regulation 5(1) |
|---|---|
| Goods (other than goods sent to a warehouse outside India) | Nine months from the date of shipment |
| Services | Nine months from the date of invoice |
| Goods exported to a warehouse outside India | Nine months from the date of sale of goods from the warehouse |
| Project exports | As per payment terms of the contract |
| Export invoiced or settled in Indian Rupees | Twelve months from the same dates |
The full export value, or the reduced export value under regulation 6, must be realised (including by set-off under regulation 7) and repatriated within these periods. A second proviso lets the Authorised Dealer extend the time on the exporter's request citing reasons for delay, if satisfied of the reasons. Regulation 5(2) requires the Authorised Dealer to put in place systems to monitor and follow up with the exporter. The nine and twelve month periods were put in by the amendment of September 22, 2026. The Regulations do not state the extension's length.
Regulation 6: reduction in export realisation
An Authorised Dealer may, on the exporter's request citing reasons for under-realisation or non-realisation of full export value, allow a reduction, if satisfied of the reasons. Where the export value is up to ₹10 lakh (or its equivalent) per shipping bill or invoice, the reduction, including non-realisation of full value, may be permitted on a declaration from the exporter.
Regulation 7 and regulation 8: set-off and third parties
Regulation 7 allows an Authorised Dealer to permit set-off of export receivables against import payables from or to the same overseas buyer or supplier, or with their overseas group or associate companies, within the stipulated realisation period or any extended period. Regulation 8 allows third-party receipts and payments (other than by the parties to the export or import) if the Authorised Dealer is satisfied with the bonafides of the transactions.
Regulation 13: unrealised exports
If export proceeds of an exporter remain unrealised for a period beyond one year from the due date of realisation, or the extended period allowed by an Authorised Dealer, the exporter shall undertake further exports only against receipt of full advance or an irrevocable Letter of Credit. A proviso inserted by the September 22, 2026 amendment says that exporters on the Caution List as on September 30, 2026, under Reserve Bank orders named in the proviso, continue to be governed by those orders until removed from the list.
Example
Marlin Spices Pvt Ltd, an invented exporter, ships goods on 1 November 2026 and invoices in US dollars. The nine-month period for realisation runs from the shipment date. It also exports consultancy services invoiced in Indian Rupees; for these the twelve-month period runs from the invoice date. If a buyer pays short because of a quality claim, the company asks its Authorised Dealer to allow a reduction citing reasons; if the shipping bill is up to ₹10 lakh, a declaration suffices. If the same buyer also sells the company packing material, set-off of the receivable against the payable can be allowed within the realisation period. If a shipment's proceeds remain unrealised beyond one year from the due date (or the extended date), further exports would need full advance or an irrevocable Letter of Credit.
Our guides on export of goods and services, advance payment from a foreign buyer and SOFTEX filing cover practical points. Import payments, advances, merchanting trade and the Authorised Dealers' reporting duties are in the next article.
Need help with export realisation?
Deadlines run from shipment or invoice, and extensions and reductions depend on reasons accepted by your bank. Our FEMA advisory team can review open export entries and prepare the requests.
Key takeaways
- The Regulations apply from October 01, 2026 and are amended up to September 22, 2026.
- Goods: EDF at the time of export; services: EDF within 30 days from the end of the month of invoice.
- Full export value must be realised in nine months, or twelve months for rupee-invoiced or rupee-settled exports.
- Authorised dealers may extend time, allow reduction of value (declaration up to ₹10 lakh) and allow set-off against imports.
- Proceeds unrealised for more than one year past the due date means further exports only against full advance or irrevocable Letter of Credit.
Read next
- Import payments, advances, merchanting trade and reporting: regulations 9 to 12 and 14 to 19
- Export of goods and services under FEMA
- FEMA compliance for import-export businesses
- Advance payment from a foreign buyer
Disclaimer: Based on the rules, regulations and Reserve Bank Master Directions under the Foreign Exchange Management Act, 1999 that this article names, each in the version and up to the date stated in the article, as consulted on 2 October 2026. Some texts are third-party copies or older prints and are identified as such. Limits, forms and time limits change by amendment and circular; later changes should be checked on the Reserve Bank and Gazette sites. This article is general information, not legal advice; check the official text before acting.