RBI unifies export rules for goods and services to ease compliance for MSMEs and boost digital tracking from Oct 2026.
The Reserve Bank of India has overhauled foreign exchange protocols, merging goods and services trade under the Foreign Exchange Management Regulations, 2026. These rules become effective on 01 October 2026, replacing a decade-old framework to foster a more digital-first trade environment.
Key changes for exporters:
- Service sector integration: For the first time, service and software exporters are brought under a formal reporting structure. They must now file declarations within a 30-day window of invoicing, with the option for consolidated monthly submissions.
- Support for small businesses: To assist smaller firms, export transactions up to ₹10 lakh no longer require exhaustive bank documentation. Instead, these can be reconciled via self-declaration and quarterly bulk reporting, significantly reducing red tape.
- Repatriation timelines: The standard period to bring export proceeds back to the country remains 15 months, though this is extended to 18 months for trades settled in Indian Rupees.
- Bank accountability: Commercial banks now have greater autonomy to approve extensions but must log all data into the Export Data Processing and Monitoring System (EDPMS) within five working days.
- Stricter default rules: Firms with payments overdue by more than one year will be restricted, requiring full advance payment or irrevocable letters of credit for any future shipments.
This reform shifts India towards a principle-based regulatory system, granting banks more discretion while ensuring transparency through strict electronic tracking.
SOURCE – BUSINESS STANDARD
