From 1 October 2026, an Indian exporter has nine months to bring export proceeds back into India, not the fifteen months the Regulations originally provided. On 22 September 2026, the Reserve Bank of India (RBI) amended the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 before the consolidated framework had even taken effect. The amendment shortens the realisation timeline, preserves the position of exporters on the RBI Caution List, and hands Authorised Dealer (AD) banks new powers over legacy transactions.
This post explains what changed, how it fits into the wider 2026 framework, and what exporters and their advisers should review before the new timelines apply.
What is the export realisation period under FEMA?
The export realisation period is the time an exporter has to receive the full value of exported goods or services and repatriate it to India through the banking channel. Under Regulation 5 of the 2026 Regulations, the clock runs from the date of shipment for goods and from the date of invoice for services. For goods exported to a warehouse outside India, it runs from the date of sale from the warehouse.
The rule exists to keep export earnings flowing home in a predictable timeframe. It also lets the RBI and AD banks monitor outstanding export receivables. An exporter who cannot realise proceeds within the period can ask its Authorised Dealer for an extension, citing reasons for the delay. Failing to realise proceeds without one is a contravention of the regulations.
What has the RBI changed?
The 22 September 2026 notification (No. FEMA 23(R)/(1)/2026-RB) amends Regulation 5(1) of the 2026 Regulations. It is issued under Sections 7, 8, 10(6) and 47(2) of the Foreign Exchange Management Act, 1999 and comes into force on 1 October 2026. The headline changes are these:
| Category | As notified, January 2026 | From 1 October 2026 |
| Exports of goods and services | 15 months | 9 months |
| Exports invoiced and/or settled in Indian Rupees | 18 months | 12 months |
The RBI’s consolidated text of the Regulations, amended up to 22 September 2026, records that the relevant periods read fifteen and eighteen months before the substitution. Two points of scope are worth noting. Project exports are not affected, because Regulation 5(1)(c) ties realisation to the payment terms of the contract. The six-month limit for merchanting trade transactions under Regulation 16 is also unchanged. Separately, the 2026 Regulations apply only from 1 October 2026, so the period that governs a shipment made before that date depends on the framework in force at the time. Exporters should confirm the position for such shipments with their AD bank.
How the amendment fits into the 2026 framework
The amendment sits on top of a much larger reform. The RBI notified the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 on 13 January 2026, followed by Directions on 16 January 2026. From 1 October 2026 they supersede the Foreign Exchange Management (Export of Goods and Services) Regulations, 2015, and, according to published summaries, the related Master Directions and legacy circulars.
The consolidated framework brings goods, services and software exports, imports and merchanting trade under one structure. It also does several things exporters should know about:
- Extensions through AD banks. Under the second proviso to Regulation 5(1), an AD may, on request citing reasons for the delay, allow extension beyond the specified period if it is satisfied with the reasons. Regulation 19 requires each AD to have a documented policy on extensions.
- Set-off as realisation. Under Regulation 7, an AD may allow set-off of export receivables against import payables from or to the same overseas buyer or supplier, or their overseas group or associate companies, within the realisation period or any extended period.
- Services declarations. Under Regulation 3(2), an exporter of services files an Export Declaration Form within 30 days from the end of the month in which the invoice is raised.
The amendment does not disturb these features. It tightens one number, the realisation window, which matters most to an exporter’s working capital and contract terms.
Regulation 13 and the Caution List carve-out
Regulation 13 deals with unrealised exports. If an exporter’s proceeds remain unrealised for more than one year beyond the due date, or beyond any extended period allowed by the AD, further exports may be undertaken only against full advance payment or an irrevocable Letter of Credit.
The amendment adds a proviso to Regulation 13 for exporters on the RBI Caution List. Those who appear on the list as on 30 September 2026, under orders issued by the RBI under Regulation 16 of the 2015 Regulations, continue to be governed by that order until their names are removed from the list.
In practice, an exporter already on the list is not moved into the new framework automatically. The earlier order continues to apply until removal.
New Regulation 20: legacy transactions move to Authorised Dealers
The amendment inserts a new Regulation 20. It requires ADs to handle transactions relating to exports, imports and merchanting trade undertaken before 1 October 2026 that previously required RBI approval under the 2015 Regulations, the Master Direction on Export of Goods and Services (as updated till 17 July 2026) or the Master Direction on Import of Goods and Services (as updated till 12 January 2026).
This is a meaningful operational change. Older transactions that would once have been referred to the RBI can now be dealt with by the exporter’s or importer’s AD bank. That should shorten turnaround times. The scope is limited to transactions that needed RBI approval under those three instruments, and the AD bank will still apply its own diligence.
What this means for exporters
The practical impact of a shorter window falls on contracts and cash flow. Four areas deserve attention.
- Payment terms: A foreign-currency export contract with payment terms beyond nine months now sits outside the permitted period, unless the AD bank allows an extension. Project exports are the exception, since realisation there follows the contract’s payment terms. For INR-invoiced or INR-settled exports, the comparable threshold is twelve months. Long credit cycles, retention payments and staged milestones all need a second look.
- The currency choice: The gap between the two timelines is now three months. An exporter who can invoice or settle in rupees gets a longer window than one who invoices in a foreign currency. That is a legitimate factor in commercial negotiation, but it should be weighed alongside pricing, exchange-rate exposure and the counterparty’s willingness to transact in INR.
- Open receivables: Ageing receivables from shipments made close to the changeover need attention first. Exporters should identify which balances are approaching the relevant limit and whether an extension application through the AD bank is likely to be needed.
- Disputed or delayed payments: Where a buyer disputes an invoice or payment is held up, the exporter’s obligation to realise proceeds does not pause of its own accord. Documenting the dispute and approaching the AD bank early is far safer than waiting for the period to run out.
Consequences of non-compliance for you
Section 13(1) of FEMA provides that a person who contravenes any provision of the Act, or any rule, regulation, direction or order issued under it, is liable on adjudication to a penalty of up to three times the sum involved where the amount is quantifiable. Where it is not quantifiable, the penalty can extend to two lakh rupees. If the contravention continues, a further penalty of up to five thousand rupees for each day after the first may be imposed.
Beyond the statutory penalty, Regulation 13 restricts an exporter with long-unrealised proceeds to exporting against full advance or an irrevocable Letter of Credit. Section 15 allows the RBI to compound contraventions on an application by the person concerned, subject to the exceptions in the Act. Compounding is a route to regularise a lapse, but it is far better to avoid the lapse than to rely on it.
Checklist for Businesses
Here is a checklist you can use before the update, to align your business with the latest FEMA guidelines:
- Map every open export receivable against the shipment or invoice date and the timeline that applies to it.
- Review payment terms in existing export contracts and in contracts under negotiation.
- Identify receivables that may need an extension and discuss the process with the AD bank in advance.
- Check whether the exporter appears on the RBI Caution List and, if so, which orders continue to apply.
- Note any legacy transactions that previously needed RBI approval and ask the AD bank whether Regulation 20 now covers them.
Frequently asked questions
1.When do the new timelines take effect?
The amendment comes into force on 1 October 2026, along with the consolidated 2026 Regulations.
2. Does the 9-month limit apply to services exports?
Yes. Regulation 5(1)(a) covers goods and services, and for services the period runs from the date of invoice. Project exports follow the payment terms of the contract.
3. Is there a different period for exports in rupees?
Yes. For exports invoiced and/or settled in Indian Rupees, the period is now 12 months instead of 18.
4. Can an extension be obtained?
Yes. An AD may, on request citing reasons for the delay, allow an extension beyond the specified period if it is satisfied with the reasons. The Regulation sets no fixed cap, and each AD applies its own internal policy.
Key takeaways
The RBI has reduced the export realisation window from 15 to 9 months, and from 18 to 12 months for rupee exports, effective 1 October 2026. Caution List exporters remain under earlier orders until removed, and new Regulation 20 lets AD banks handle certain legacy transactions without RBI approval. For exporters, the immediate work is a contract and receivables review while there is still time to renegotiate terms or plan extensions.
unPrimary sources: RBI Notification No. FEMA 23(R)/(1)/2026-RB dated 22 September 2026; the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (Notification No. FEMA 23(R)/2026-RB), as amended up to 22 September 2026, on rbi.org.in; Section 13, Foreign Exchange Management Act, 1999.
This article is for general information and does not constitute legal advice. Readers should refer to the RBI’s notification and Directions, and take professional advice on their specific circumstances.
