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In a bid to rationalise regulations covering export and import transactions, the Reserve Bank of India (RBI) on Tuesday unveiled draft regulations. This is expected to promote ease of doing business, especially for small exporters and importers.
The draft regulations, Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2024, are also intended to empower authorised dealer (AD) banks to provide quicker and more efficient service to their foreign exchange customers.
The amount representing the full export value of goods and services has to be realised and repatriated to India within nine months from the date of shipment for goods and the date of invoice for services, per the draft regulations.
The AD Bank (authorised to deal in foreign exchange) may, for reasonable and sufficient cause shown by the exporter, extend the specified period.
Similarly, the AD may grant an extension of time to the importer beyond the period specified in the contract in cases where there is delayed settlement of import payments and if the overseas supplier delays in fulfilling its obligation in cases of import advance.
AD banks may allow set-offs of export receivables against import payables in respect of the same counterparties, per the draft regulations.
However, they cannot allow the set-off of export receivables for goods against import payables for services and vice versa.
Imports of gold and silver
The RBI said no advance remittance for the import of gold and silver will be permitted unless specifically approved by it.
However, an AD bank may allow a qualified jeweller to remit advance payments towards the import of gold and silver through India International Bullion Exchange IFSC Ltd. (IIBX).
RBI said AD banks have to monitor the progress of work in project exports till their completion by seeking regular progress reports from the exporters in order to facilitate the corresponding payments.
Caution listing exporters
Where an export amount is outstanding in the Export Data Processing and Monitoring System (EDPMS) for a period of more than two years from the due date of realisation (including extension of the period granted by AD bank, if any), AD banks have to ensure that the exporter is flagged as ‘caution listed’ in the system.
The exporter has to be duly informed before caution listing in EDPMS and should be given the opportunity to be heard.
Once all outstanding export proceeds are realised (including by way of setoff or reduction in realisable value), AD banks have to remove the exporter from the caution list
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