Every container of goods that leaves an Indian port and every shipment that arrives generates a foreign exchange obligation — proceeds to be realised, payments to be remitted, evidence to be filed. The regulatory machinery that tracks these flows has produced 225 RBI circulars (165 export, 60 import) since FEMA came into force, and in October 2016, went fully electronic with the Import Data Processing and Monitoring System.
The framework rests on a simple principle embedded in Section 7 of FEMA, 1999: export proceeds must come back to India within a prescribed period, and import payments must be supported by evidence that goods actually arrived. Everything else — the realisation periods, the write-off thresholds, the advance payment conditions, the deferred payment windows — is the operational machinery built around that principle.
See also: Foreign Exchange Regulation in India — The Complete Timeline
For the policy story behind India's trade forex controls — why the 9-month deadline exists and how IDPMS tracks every shipment — see Why Your Export Payment Must Arrive in 9 Months.
Export Regulations
The Foundational Regulation
The current governing regulation is FEMA 23(R)/2015-RB (Foreign Exchange Management (Export of Goods & Ser) (38 downstream refs), which superseded the original FEMA 23/2000-RB. It defines export broadly:
"'Export' includes the taking or sending out of goods by land, sea or air, on consignment or by way of sale, lease, hire-purchase, or under any other arrangement by whatever name called, and in the case of software, also includes transmission through any electronic media." (RBI_10256, Regulation 2)
Realisation Period: 15 Months
The clock starts ticking on the date of export:
"The amount representing the full export value of goods/software/services exported shall be realised and repatriated to India within fifteen months from the date of export." (RBI_10256, Regulation 9)
For goods exported to overseas warehouses: "The amount shall be paid to the authorised dealer as soon as it is realised and in any case within fifteen months."
Advance Payment Against Exports
When a foreign buyer pays in advance:
"The shipment of goods is made within three years from the date of receipt of advance payment." (RBI_10256, Regulation 15)
Interest cap on advances: "The rate of interest, if any, payable on the advance payment shall not exceed 100 basis points above LIBOR or other applicable benchmark."
Failure to ship: "In the event of the exporter's inability to make the shipment within three years from the date of receipt of advance payment, no remittance towards refund of unutilized portion shall be made after the expiry of the period of three years, without the prior approval of the Reserve Bank."
Document Submission
"The documents pertaining to export shall be submitted to the authorised dealer within 21 days from the date of export, or from the date of certification of the SOFTEX form." (RBI_10256, Regulation 10)
Gift Exemption
"By way of gift of goods accompanied by a declaration by the exporter that they are not more than five lakh rupees in value." (RBI_10256, Regulation 4(d))
Import Regulations
Payment Time Limit
The Master Direction on Import of Goods and Services (Master Direction – Import of Goods and Services () sets the baseline:
"Remittances against imports should be completed not later than six months from the date of shipment." (RBI_10201, B.5.1)
During COVID, this was temporarily doubled: "The time period for completion of remittances was extended from six months to twelve months for imports made on or before July 31, 2020."
Deferred Payment (Trade Credits)
"Any deferred payment arrangements, for up to three years in case of import of capital goods and up to one year or the operating cycle whichever is less in case of import of non-capital goods, shall be treated as trade credits." (RBI_10201, B.5.2)
Extension of Time
"AD Category-I banks can consider granting extension of time for settlement of import dues up to a period of six months at a time (maximum up to the period of three years) irrespective of the invoice value for delays on account of disputes about quantity or quality or non-fulfilment of terms of contract; financial difficulties and cases where importer has filed suit against the seller." (RBI_10201, B.5.4)
Beyond one year, a ceiling applies: "The total outstanding of the importer does not exceed USD one million or 10 per cent of the average import remittances during the preceding two financial years, whichever is lower."
Overdue interest: "Interest on delayed payments is payable only for a period of up to three years from the date of shipment."
Advance Remittance for Imports
The Import Master Direction (Master Direction – Import of Goods and Services () sets a tiered guarantee system:
| Advance Amount | Requirement |
|---|---|
| Up to USD 200,000 | No guarantee required |
| USD 200,000 – USD 5,000,000 | Guarantee required (but may be waived) |
| Above USD 5,000,000 | Unconditional, irrevocable standby LC or bank guarantee from international bank |
| Public sector (above USD 100,000) | Ministry of Finance waiver required |
"If the amount of advance remittance exceeds USD 200,000, an unconditional, irrevocable standby Letter of Credit or a guarantee from an international bank of repute situated outside India is obtained." (RBI_10201, C.1.1)
"The requirement of the bank guarantee may not be insisted upon for advance remittances up to USD 5,000,000." Master Direction – Import of Goods and Services (
IDPMS — The Electronic Backbone
April 2016: Framework Announced
IDPMS Framework for Import Monitoring RBI/2015-16/385 (31 downstream refs, April 28, 2016) laid the groundwork — defining Outward Remittance Messages, Bill of Entry matching, write-off procedures, and extension protocols.
Write-off threshold:
"AD Category I banks can consider closure of bills in IDPMS that involve write off to the extent of 5% of invoice value in cases where the amount declared in BoE varies from the actual remittance marginally due to discounts, fluctuation in exchange rates, change in the amount of freight, insurance, etc." Import of Goods: Import Data Processing and Monitoring Syste...
Evidence of import reporting threshold:
"AD Category-I banks have to submit a statement on half-yearly basis furnishing details of import transactions exceeding USD 100,000 in respect of which importers have defaulted in submission of appropriate document evidencing import within six months from the date of remittance." Import of Goods: Import Data Processing and Monitoring Syste...
October 2016: Go-Live
IDPMS Go-Live Directive RBI/2016-17/78 (32 downstream refs) brought the system live:
"IDPMS will go live with effect from October 10, 2016 and all AD Category-I banks are directed to use IDPMS for reporting and monitoring of the import transactions." Import Data Processing and Monitoring System (IDPMS)
"AD banks are required to create Outward Remittance Message (ORM) for all outward remittances for import payments on behalf of their importer customer for which the prescribed documents for evidence of import have not been submitted." Import Data Processing and Monitoring System (IDPMS)
The groundwork for IDPMS was laid by a Working Group whose report recommended the electronic matching of import remittances with customs declarations — see RBI releases Report of the Working Group on IDPMS (PR_36785). IDPMS replaced a paper-based system that had survived from the FERA era — Bill of Entry forms shuffled between Customs, banks, and the RBI. The new system electronically linked Customs import declarations with bank payment records, enabling real-time monitoring of whether importers were paying for what they brought into the country.
Key Thresholds
| Parameter | Value | Source |
|---|---|---|
| Export realisation period | 15 months | FEMA 23(R), Reg. 9 |
| Export advance shipment window | 3 years | FEMA 23(R), Reg. 15 |
| Export advance interest cap | LIBOR + 100 bps | FEMA 23(R), Reg. 15 |
| Export document submission | 21 days | FEMA 23(R), Reg. 10 |
| Export gift exemption | Rs 5 lakh | FEMA 23(R), Reg. 4(d) |
| Import payment limit | 6 months from shipment | Import MD, B.5.1 |
| Import deferred payment (capital) | 3 years | Import MD, B.5.2 |
| Import deferred payment (non-capital) | 1 year or operating cycle | Import MD, B.5.2 |
| Import extension maximum | 3 years (6 months at a time) | Import MD, B.5.4 |
| Import advance (no guarantee) | Up to USD 200,000 | Import MD, C.1.1 |
| Import advance (guarantee waivable) | Up to USD 5,000,000 | Import MD, C.1.1 |
| IDPMS write-off tolerance | 5% of invoice value | RBI/2015-16/385/10633 |
| Evidence of import reporting | Defaults > USD 100,000 | RBI/2015-16/385 |
Last updated: April 2026
For the full narrative, see Why Your Export Payment Must Arrive in 9 Months.