Reserve Bank of India (RBI) introduces comprehensive relaxations for exporters and importers

The Reserve Bank of India (RBI) has introduced a series of regulatory measures aimed at reducing compliance burden and enhancing operational flexibility for exporters and importers. These changes cover reconciliation norms for small-value transactions, extended timelines for merchanting trade transactions, export realisation and advance utilisation, and retention of export proceeds in foreign currency accounts maintained in International Financial Services Centres (IFSCs).

RBI extends time period for foreign exchange outlay in Merchanting Trade Transactions (MTT): Under the earlier framework issued in January 2020 (A.P. (DIR Series) Circular No. 20 dated 23 January 2020) , the entire MTT was required to be completed within 9 months, and the foreign exchange outlay—the period during which funds remain blocked between the import and export legs—could not exceed 4 months. The commencement date was defined as the first event of shipment or export leg receipt or import leg payment, and the completion date was the last of these events.

Under the revised norms, the permissible time for foreign exchange outlay has been increased from 4 months to 6 months, while the overall completion period of 9 months remains unchanged.

The revised timeline is effective immediately and other directions under A.P. (DIR Series) Circular No. 20 dated 23 January 2020 remain unchanged.

 Source: A.P. (DIR Series) Circular No. 11 dated 1 October 2025

Small-value export and import entries: To ease compliance for small exporters and importers, revised guidelines have been issued for processing entries under the Export Data Processing and Monitoring System (EDPMS) and Import Data Processing and Monitoring System (IDPMS).

• Under the new framework, entries up to INR 1million may be closed by the Authorised Dealer (AD) banks based on a declaration from the exporter (realization) or importer (payment). Reduction in invoice value may also be accepted on declaration basis.
• Further, exporters and importers may submit quarterly consolidated declarations for multiple bills to facilitate reconciliation.
• AD banks have also been directed by the RBI, to not levy penal charges for delays in regulatory compliance for these small-value transactions.

These directions are effective immediately and have been incorporated into the relevant Master Directions.

Source: A.P. (DIR Series) Circular No. 12 dated 1 October 2025

Retention period of export proceeds: Additional relaxation has been introduced for exporters maintaining foreign currency accounts in IFSCs under the Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2015. Exporters are now permitted to open and maintain foreign currency accounts with banks located in IFSCs, and export proceeds received in such accounts may be retained for up to three months from the date of receipt of funds.

The previous one-month retention period continues to apply to foreign currency accounts maintained in non-IFSC jurisdictions. This measure is expected to enhance operational flexibility for exporters and promote IFSCs as preferred hubs for international trade settlement.

Source: Notification No. FEMA 10(R)(7)/2025-RB dated 6 October 2025

Extension of timeline for export realisation and advance utilisation: In response to evolving global trade challenges, the Foreign Exchange Management (Export of Goods and Services) Regulations, 2015 have been amended to provide greater flexibility to exporters.

The period for realizing export proceeds has been extended from 9 months to 15 months from the date of export. Similarly, exporters now have up to 3 years to utilize or refund advance receipts, as against the earlier limit of 1 year which required RBI approval for any extension.

Source: Notification No. FEMA 23(R)/(7)/2025-RB dated 13 November 2025, published in the Official Gazette on 14 November 2025