FEMA's New Export Rules, 2026: What Changes for CXOs from 1 October 2026

Regulatory Guide · Foreign Exchange & Trade Compliance · October 2026

Quick Answer: From 1 October 2026, exports of goods and services are governed by the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (Notification No. FEMA 23(R)/2026-RB), as amended on 22 September 2026, together with RBI's Directions of January 2026.

By the LexComply team

Last updated: 19 October 2026 · Content current as of 12 October 2026

They replace the 2015 Export Regulations, RBI's Master Direction on Export of Goods and Services and the circulars listed in RBI's annex. For most exporters the realisation period stays at 9 months: the 15-month and 18-month periods in the January 2026 text were cut back before they took effect, while exports invoiced or settled in INR get 12 months. Service exporters move to a monthly Export Declaration Form (EDF) in place of SOFTEX, unrealised exports beyond one year trigger an advance-or-LC-only restriction, and ₹10 lakh self-certification, set-off, third-party receipt and same-AD rules are now written into the Regulation itself. This article covers only the export side: a companion article covers imports.

What Are the Key Takeaways From the FEMA Export Regulations, 2026?

• The realisation and repatriation period is 9 months from shipment (goods) or invoice (services), not 15 months. Many articles written in January 2026 still say 15 and 18 months; RBI's amendment of 22 September 2026 reduced those figures to 9 and 12 before the Regulations commenced.
• Exports invoiced or settled in INR get a longer 12-month realisation period, the one genuine extension for most exporters.
• Exports to an overseas warehouse move to a 9-month period under Regulation 5(1)(b), counted from the date of sale from the warehouse, against the 15 months that applied under the 2015 framework.
• Services exporters, including software exporters, file a consolidated monthly Export Declaration Form (EDF) under Regulation 3; the SOFTEX form is replaced. Non-software services may file on or before the date payment is received.
• If export proceeds stay unrealised for more than a year past the due date, further exports are allowed only against full advance payment or an irrevocable Letter of Credit (Regulation 13). Exporters already on the RBI Caution List at 30 September 2026 stay under that order until removed.
• Small-value closure and reduction are self-declaration based: entries up to ₹10 lakh can be closed on the exporter's declaration, individually or in a quarterly bulk submission, and reductions up to ₹10 lakh per shipping bill or invoice need only the exporter's declaration (Regulations 4 and 6).
• Set-off of export receivables against import payables (Regulation 7), third-party receipts (Regulation 8), and the all-in-cost ceiling on interest on export advances (Regulation 10) are now expressly codified.
• Authorised Dealer banks must publish their own internal policy and SOP (Regulation 19(4)), must keep their charges reasonable and proportional to the services rendered, and cannot levy any charge or penalty on an exporter for the exporter's own regulatory delay or violation (Regulation 19(3)); they can also handle pre-1 October 2026 cases that previously needed RBI approval (Regulation 20).
• The new Regulations and Directions supersede the Master Direction on Export of Goods and Services: update every SOP that still cites it.

Why Did RBI Replace the 2015 Export Regulations?

The Reserve Bank of India notified the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (FEMA 23(R)/2026-RB) on 13 January 2026, to come into force on 1 October 2026. RBI issued accompanying Directions on Export and Import of Goods and Services in the same month (A.P. (DIR Series) Circular No. 20, reported as dated 16 January 2026). On 22 September 2026 RBI amended the Regulations (FEMA 23(R)/(1)/2026-RB, published in the Gazette on 24 September 2026), cutting the export realisation periods, adding a Caution List proviso to Regulation 13, and inserting a new Regulation 20 on transitional powers for Authorised Dealers (AD banks).

From 1 October 2026 the new framework supersedes the Foreign Exchange Management (Export of Goods & Services) Regulations, 2015, RBI's Master Direction on Export of Goods and Services, the Master Direction on Import of Goods and Services, and the circulars listed in the annex to RBI's Directions. FEDAI has also circulated implementation clarifications to member banks (SPL-07/Trade/2026, 23 September 2026). This article covers only what changes for exporters; the import-side changes are covered in a companion article.

Old Position vs New Position: What Changes for Exporters From 1 October 2026?

The table compares the position up to 30 September 2026 (2015 Export Regulations, RBI's Master Direction on Export of Goods and Services and related circulars) with the position from 1 October 2026 under FEMA 23(R)/2026-RB as amended on 22 September 2026. Rows marked 'confirm' rest on secondary reporting and should be checked against the Directions or your AD bank before you rely on them.

Open Points To Confirm With Your AD Bank

• Extension of the realisation period: the AD may extend on a reasoned request, but we found no stated outer cap. The limits will sit in each bank's own policy under Regulation 19.
• EDF timing for non-software services: the 30-day-from-month-end limit and the payment-date option can be read together in different ways. Treat 30 days from month-end as the outer limit until RBI's FAQs arrive.
• Personal-nature contracts: the RBI Governor said on 7 October 2026 that individuals' personal contracts need not be reported and that FAQs will follow. This is press-reported, not a circular.
• Write-off: reports differ on whether the 5% self write-off (10% for status holders) was dropped and whether AD write-off up to 10% in specified cases survives. Confirm before writing off any balance.
• Goods exported free of cost: reported to be declared at nil value on the EDF without RBI approval. Confirm the conditions.

What Has Not Changed for Exporters?

• Export licensing and Foreign Trade Policy conditions (DGFT): these sit outside FEMA and are untouched.
• Customs shipping-bill mechanics and EDPMS as the monitoring platform for export entries.
• Project exports: receipts continue to follow the contract's payment terms (Regulation 5(1)(c) is not amended).
• The consequences of non-compliance: a contravention of FEMA still exposes an exporter to penalty or compounding, however the timelines have changed.

Note: some January 2026 summaries still quote the 15-month and 18-month periods. Those figures were replaced before the Regulations took effect. Always check the date of an article against the 22 September 2026 amendment.

Which Sectors Are Most Affected by the New FEMA Export Rules?

The changes do not land evenly. Service exporters take on a new monthly filing, overseas-warehouse sellers lose time, and exporters invoicing in INR gain it.

IT, ITES, SaaS and Professional Services Exporters

• The biggest operational change: a consolidated monthly EDF (Regulation 3) replaces SOFTEX for software and brings other services into declaration for the first time, covering all recipients in a month in one filing.
• Finance teams should build a monthly EDF close into the billing cycle, with a 30-day-from-month-end working deadline, and keep the invoice date as the start of the 9-month realisation clock.
• Long-cycle enterprise contracts and milestone billing do not get a longer window: 9 months applies unless the invoice is in INR (12 months) or the AD grants an extension.
• Freelancers and individual service providers: the RBI Governor has said personal-nature contracts need not be reported, with FAQs to follow. Confirm your position with the AD before relying on that.

Merchandise Exporters: Manufacturing, Engineering, Textiles, Chemicals, Pharma

• The headline number is unchanged at 9 months from shipment, so cash-flow models built on the temporary 15-month window should be reset, not extended.
• Rupee invoicing or settlement earns 12 months, which is worth weighing against hedging cost and buyer acceptance for corridors where Rupee settlement is already workable.
• Regulation 13 now bites at the overseas buyer level as reported in the FEDAI circular, so a single defaulting buyer should not freeze the rest of the order book. Confirm this in the circular before you restructure credit policy.
• Exporters on the RBI Caution List at 30 September 2026 remain under that order until removed; treat removal as a separate project.

Gems, Jewellery and Precious Metal Exporters

• Long consignment and sale-or-return cycles make the 9-month clock the main exposure; track each shipment individually and escalate unrealised balances to the AD for extension well before month 9.
• Export advances and interest are now tied to the trade-credit all-in-cost ceiling under Regulation 10, and the advance and later realisation must stay with the same AD.
• Overseas showroom or warehouse sales fall under the 9-month warehouse rule counted from the date of sale.

E-Commerce Exporters and Overseas Warehouse Sellers

• Warehouse exports fall from 15 months to 9 months under Regulation 5(1)(b), counted from the date of sale from the warehouse. Sellers holding stock overseas for long periods should recheck inventory ageing against the new clock.
• High volume, low value shipments benefit from the ₹10 lakh self-certification and the quarterly bulk submission, which cut the realisation-evidence burden.
• Marketplace payout delays should be monitored against the realisation period per shipment, not per payout batch.

MSME Exporters

• The ₹10 lakh closure threshold and quarterly declaration reduce bank paperwork for the bulk of small shipments.
• Regulation 19(3) protects exporters least able to absorb unexplained bank charges: an AD's charges must be reasonable and proportional to the services rendered, and no charge or penalty may be levied for the exporter's own regulatory delay or violation.
• Smaller exporters feel the 9-month limit most when buyers pay slowly: ask the AD about extension criteria early, and record reasons.

Project Exporters and EPC Contractors

• Regulation 15 keeps receipts tied to the contract's payment terms, and temporary surplus cash can be placed in instruments maturing within a year.
• The separate Project Export framework is reported as repealed, so contract terms and AD documentation should be checked against the new Regulation.

Merchant Traders and Merchanting Trade

• The 6-month gap between outward and inward remittance continues in Regulation 16, and ADs can extend it and allow third-party flows on a reasoned request.
• The overall 9-month completion limit is reported as removed. Do not drop internal controls on it until the Directions or your AD confirm it.
• Set-off against the same overseas counterparty or group companies (Regulation 7) suits back-to-back purchase and sale structures, within the realisation period.

Banks, NBFCs and Trade-Finance Intermediaries

• Regulation 19 requires each AD to maintain a published internal policy and SOP, including on export factoring; expect differing extension criteria and documentation across banks.
• Regulation 18 requires EDF entries into EDPMS within five working days, a new service-level obligation for operations teams.
• Regulation 20 gives ADs authority over pre-1 October 2026 cases that earlier needed RBI approval, so banks need a clear process for these requests.

What Are the FEMA Export Compliance Action Points for CXOs?

Organised by function, so each owner can work from their own list.

Treasury and Finance

• Reset cash-flow and DSO models to a 9-month realisation clock; reverse any model that assumed 15 or 18 months.
• Test Rupee invoicing or settlement for suitable corridors to access the 12-month period, weighing buyer acceptance, hedging and pricing.
• Review open export advances: confirm the same AD handles the advance and later realisation, and check interest against the trade-credit all-in-cost ceiling.
• Age every open receivable by shipment or invoice date and flag balances approaching month 9 for AD extension requests.
• For overseas-warehouse stock, rebuild the clock from the date of sale and confirm the treatment of pre-1 October shipments with the AD.

Legal and Compliance

• Replace every reference to the 2015 Regulations and the Master Direction on Export of Goods and Services in SOPs, delegations and contract templates.
• Build a Regulation 13 escalation process: unrealised beyond one year triggers advance-or-LC-only terms for the specific buyer, and Caution List status is tracked separately.
• Obtain each AD's internal policy and SOP under Regulation 19, compare extension criteria, and brief the board on Regulation 19(3): charges must be reasonable and proportional to the services rendered, and no charge or penalty may be levied for the exporter's own regulatory delay or violation.
• Keep a dated file showing which framework governed each transaction, since shipments straddle 30 September and 1 October 2026.
• Do not write off or reduce balances without checking the AD's current written position, given conflicting reports on write-off limits.

Sales, Commercial and Export Operations

• Re-paper payment terms and buyer credit limits to reflect the 9-month limit, with an internal trigger well before it expires.
• For services, move to one consolidated EDF per month covering all clients, filed within 30 days of month-end.
• Use set-off and third-party receipt options only where documentation matches Regulations 7 and 8, including the third party's details on the EDF.
• Review merchanting structures against Regulation 16 and keep the 6-month gap controls in place.

IT, ERP and Systems

• Change export-realisation alerts from 15/18 months to 9 months (12 months where invoiced or settled in INR).
• Build an EDF module that aggregates a month's service invoices, with a deadline calendar and AD extension log.
• Add ₹10 lakh logic to EDPMS closure and reduction workflows, including the quarterly bulk declaration.
• Flag buyers with unrealised balances beyond one year so that new orders are held for advance or LC terms.

What Are the Common Mistakes to Avoid Under the New Export Rules?

Every point below restates an obligation already set out above; none of them adds a new rule.

• Leaving 15-month or 18-month realisation alerts in treasury dashboards and ERP systems. Those figures were cut to 9 and 12 months by the 22 September 2026 amendment, before the Regulations commenced.
• Assuming overseas-warehouse stock still carries 15 months. Regulation 5(1)(b) sets 9 months, counted from the date of sale from the warehouse.
• Carrying on with SOFTEX for software exports. A consolidated monthly EDF under Regulation 3 replaces it, and non-software services now have to be declared too.
• Treating the 12-month Rupee period as available on every Rupee-denominated deal. It applies to exports invoiced or settled in INR, and Regulation 17 points to RBI's own INR framework, so the settlement channel has to qualify.
• Splitting an export advance and the later realisation across two banks. Regulation 10 requires the same Authorised Dealer unless both banks have been informed of the change.
• Letting a receivable pass one year beyond its due date without an escalation. Regulation 13 then limits further exports to full advance payment or an irrevocable Letter of Credit.
• Assuming removal from the RBI Caution List happened automatically on 1 October 2026. Exporters on the list at 30 September 2026 stay under the existing order until they are removed.
• Writing off or reducing a balance on the old Master Direction limits. Reports conflict on what survives, so the AD's current written position comes first.
• Relaxing merchanting-trade controls on the strength of a summary that says the overall 9-month completion limit is gone. Confirm it in the Directions first.
• Leaving SOPs, delegation matrices and contract templates citing the 2015 Regulations or the superseded Master Direction.

Legal Disclaimer

This article summarises RBI's FEMA 23(R)/2026-RB Regulations as amended on 22 September 2026 and is independent commentary, not legal advice. Several points above rest on secondary reporting and are marked for confirmation, including EDF timing for non-software services, write-off limits, the buyer-level scope of Regulation 13 and the merchanting-trade completion limit. Confirm transaction-specific positions with your Authorised Dealer bank or RBI before acting.

Frequently Asked Questions

What exactly changed for exporters on 1 October 2026?

The Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (FEMA 23(R)/2026-RB), as amended on 22 September 2026, came into force with RBI's Directions. They replaced the 2015 Export Regulations, the Master Direction on Export of Goods and Services and the circulars in RBI's annex. The main changes for exporters are a 12-month period for Rupee-invoiced or settled exports, a 9-month period for overseas-warehouse exports, a monthly EDF for service exporters, and codified rules on set-off, third-party receipts, export advances and unrealised exports.

Is the export realisation period 9, 12 or 15 months?

It is 9 months from shipment (goods) or invoice (services) under Regulation 5(1)(a), and 12 months where the export is invoiced or settled in INR. The January 2026 text carried 15 and 18 months, but the 22 September 2026 amendment reduced them before commencement. Articles that still quote 15 or 18 months are out of date. An AD can extend the period on a reasoned request.

Does the 12-month period apply to every Rupee export?

It applies to exports invoiced or settled in INR under the first proviso to Regulation 5(1). Regulation 17 points to RBI's INR invoicing and settlement framework, so confirm with your AD which settlement channels qualify before you promise a Rupee-based credit period to a buyer.

What happens to exports to an overseas warehouse?

Regulation 5(1)(b) sets 9 months, counted from the date of sale from the warehouse. Under the 2015 framework the period was 15 months. Check how shipments made before 1 October 2026 are treated with your AD.

What is the EDF, and who must file it?

The Export Declaration Form now covers services, including software, replacing SOFTEX. Under Regulation 3 one EDF per month can cover exports to one or more recipients, filed within 30 days of month-end. For services other than software it may instead be filed on or before the date payment is received. The AD can extend the time on a reasoned request. Treat 30 days from month-end as the safe outer limit until RBI's FAQs clarify how the two timelines interact.

Do freelancers and individuals need to file an EDF?

The RBI Governor said on 7 October 2026 that personal-nature contracts of individuals need not be reported, and that FAQs will follow. That statement is press-reported and no circular has been issued, so confirm with your AD bank if you export services as an individual.

What is the ₹10 lakh threshold, and is it new?

Under Regulation 4, an exporter's own declaration can close an EDPMS entry of ₹10 lakh or less, individually or in a quarterly bulk submission. Regulation 6 allows a reduction in realised value of up to ₹10 lakh per shipping bill or invoice on the exporter's declaration alone. The closure threshold was already live through an RBI circular from 1 October 2025; the Regulation now writes it into the text.

What happens if export proceeds stay unrealised beyond one year?

Under Regulation 13, if proceeds remain unrealised more than one year after the due date or extended date, further exports are allowed only against full advance payment or an irrevocable Letter of Credit. FEDAI's SPL-07/Trade/2026 is reported to limit the restriction to the specific overseas buyer concerned. We have not reviewed the circular text, so confirm the buyer-level reading with your AD before you rely on it.

What about exporters already on the RBI Caution List?

The 22 September amendment adds a proviso to Regulation 13: exporters on the Caution List as of 30 September 2026 remain under the existing RBI order until they are removed from the list.

Can we set off export receivables against import payables?

Yes. Regulation 7 lets an AD allow set-off against the same overseas buyer or supplier, or their overseas group or associate companies, within the realisation period or its extension. Regulation 5(1) counts set-off as realisation. Reports indicate goods receivables can now be set off against service payables and that some earlier conditions are not restated, so confirm the detail in the Directions.

Is there a cap on interest on export advances?

Yes. Regulation 10 ties interest on export advances to the all-in-cost ceiling for trade credit under the Borrowing and Lending Regulations, 2018. The advance and later realisations must also stay with the same AD unless both banks are informed of a change.

What does Regulation 19(3) say about an AD bank's charges?

It has two limbs. An Authorised Dealer must ensure that the charges it levies for handling transactions and associated processes are reasonable and proportional to the services rendered. It must also not levy any charge or penalty on its constituent, meaning the exporter, importer or merchant trader, for any regulatory delay or violation by that constituent. Penalising a FEMA contravention remains RBI's function, not the bank's.

Did the 9-month completion rule for merchanting trade survive?

Regulation 16 keeps the 6-month gap between outward and inward remittance and lets ADs extend it and permit third-party flows on a reasoned request. Several summaries report that the overall 9-month completion limit is removed. Confirm this in the Directions before relaxing internal controls.

Does the new framework replace the Master Direction on Export of Goods and Services?

Yes. From 1 October 2026 the Regulations and Directions supersede the 2015 Export Regulations, the Master Direction on Export of Goods and Services, the Master Direction on Import of Goods and Services and the circulars listed in RBI's annex. SOPs that cite those documents should be updated.

What if the shipment was made before 1 October 2026?

Regulation 20 lets ADs handle export, import and merchanting transactions begun before 1 October 2026 that earlier needed RBI approval. We found no separate transition rule for warehouse shipments made before that date, so ask your AD which period applies.

What should exporters do first?

Reset realisation alerts to 9 months (12 for Rupee exports), list every receivable approaching month 9, set up the monthly EDF if you export services, and ask each AD bank for its Regulation 19 policy and extension criteria. Everything else can follow your normal compliance cycle.

How Does LexComply Track FEMA Compliance Requirements for Companies in India?

A transition that touches treasury, legal, sales operations and IT at once is where a compliance platform and hands-on advisory need to work together, not separately.

GCMS: the compliance management layer

• Realisation clock tracking: GCMS can hold a 9-month or 12-month (INR) clock per shipment or invoice, record AD extensions, and flag approaching deadlines before an export turns into an unrealised-export event.
• EDF filing calendar: a monthly EDF task for service exporters with a 30-day-from-month-end deadline, owner assignment and evidence of filing.
• EDPMS closure workflow: the ₹10 lakh self-certification and quarterly bulk-declaration routes built in as standard workflows rather than a repeated manual exercise.
• Unrealised-export triggers: GCMS can flag a buyer whose balance has been outstanding beyond one year so new orders are held for advance or LC terms, and track Caution List status separately.
• Set-off and third-party register: the basis for each set-off against import payables and each third-party receipt, with counterparty, documents and AD approval.
• AD policy register: Regulation 19 policies, extension criteria and charges by banking relationship, in one place.
• Audit trail and monitoring: version-controlled evidence for each export, and alerts when RBI publishes the promised FAQs or revises the Directions.

FEMA and trade-regulation advisory

• Transaction-specific interpretation: LexComply's advisory team tracks open points such as EDF timing, write-off limits and buyer-level scope of Regulation 13, and advises on the interim position.
• AD-bank SOP review: assessing each bank's Regulation 19 policy against your export book and flagging where extension criteria or documentation differ materially.
• EDF design for service exporters: mapping billing systems to a monthly EDF, including multi-client invoicing and software versus non-software timelines.
• INR invoicing structure: reviewing whether Rupee invoicing or settlement for key corridors justifies the 12-month period.
• Regularisation support: preparing AD and RBI representations for overdue realisations, extensions and pre-1 October 2026 cases under Regulation 20.
• Contract and SOP realignment: updating credit terms, delegation matrices and templates that still cite the 2015 Regulations or the old Master Direction. To scope this against your own export book, get in touch with the team.

Sources

• Reserve Bank of India, Notification No. FEMA 23(R)/2026-RB, Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, dated 13 January 2026, effective 1 October 2026.
• Reserve Bank of India, Notification No. FEMA 23(R)/(1)/2026-RB, Amendment Regulations, dated 22 September 2026 (Gazette, 24 September 2026).
• Reserve Bank of India, Directions on Export and Import of Goods and Services (A.P. (DIR Series) Circular No. 20, reported as dated 16 January 2026). We could not open the Directions; points attributed to them are marked 'confirm'.
• Reserve Bank of India, Master Direction on Export of Goods and Services (updated up to 17 July 2026), superseded from 1 October 2026.
• Reserve Bank of India, FEMA 23(R)(8)/2026-RB, First Amendment Regulations dated 5 June 2026, restoring the 9-month realisation period; and FEMA 23(R)(7)/2025-RB dated 13 November 2025
• Foreign Exchange Dealers' Association of India (FEDAI), SPL-07/Trade/2026, 23 September 2026, clarifications on implementation of the 2026 Regulations. We relied on FEDAI's published newsletter, not the circular text.
• Business Standard, 'New FEMA trade rules: more flexibility and greater bank oversight', 28 September 2026
• FoxMandal, 'India's EXIM framework: RBI amends FEMA Regulations', October 2026
• Business Today, 'Individuals not covered: RBI clears air on new EDF framework', 7 October 2026
• A companion article covers the import-side changes under FEMA 23(R)/2026-RB.