RBI Simplifies FEMA Regulations to Boost Trade Efficiency

The Reserve Bank of India released revised draft regulations under FEMA to streamline export and import transactions, aiming to enhance business ease. Highlights include conditions on unrealized export proceeds and restrictions on gold and silver imports. The central bank seeks public feedback on the draft by April 2025.

The Reserve Bank of India (RBI) has unveiled revised draft regulations impacting export and import transactions under the Foreign Exchange Management Act (FEMA). The move aims to simplify the regulatory environment and foster ease of doing business.

Among the notable changes, exporters with more than Rs 25 crore of unrealized export proceeds extended beyond two years must secure full payment in advance or obtain an irrevocable letter of credit for further exports. Meanwhile, the proposed rules bar authorised dealers from accepting advance payments for gold and silver imports.

These revised drafts, initially released in July of the previous year, have been refined following public feedback and stakeholder consultations. The RBI invites additional comments on these proposals until April 30, 2025.

(With inputs from agencies.)