A finance head once told us about a nasty surprise. Her company had an export invoice pending for months. Nobody was tracking the deadline. By the time the bank asked about it, the realisation period was almost over.
Rules like this are about to change. From 1 October 2026, a new set of FEMA export import regulations 2026 comes into force. Timelines change. Forms change. The role of your bank changes too.
This guide explains the changes in simple words. It also shows what you should do before the date arrives.
What are the FEMA Export and Import Regulations, 2026?
The RBI has issued one combined rulebook for cross-border trade. It is called the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026. The notification number is FEMA 23(R)/2026-RB, dated 13 January 2026.
It replaces the 2015 export regulations. It also pulls in many older circulars and directions. One rulebook now covers goods, services, software, imports and merchanting trade.
Why Did RBI Introduce a New Framework?
The old system was scattered. Rules sat in regulations, Master Directions and many circulars. Businesses often had to search across several documents to answer one question.
The new framework aims to fix that. It brings everything under one roof. It also reduces paperwork for small transactions and gives banks more room to decide.
Key Changes at a Glance
| Area | Earlier Framework | FEMA 2026 Framework |
|---|---|---|
| Rulebook | Many regulations and circulars | One consolidated framework |
| Export realisation period | As per existing rules | 9 months (12 months for specified INR exports) |
| Software exports | SOFTEX-based reporting | EDF-based reporting |
| Import payment timeline | Fixed regulatory timelines | Based on the contract |
| Small-value closure | Regular procedure | Declaration-based closure up to ₹10 lakh |
| Set-off | Existing provisions | Expressly allowed |
| Third-party payments | Allowed with conditions | Expressly recognised |
| Role of AD banks | Limited | Greater responsibility |
Export Realisation Period: 9 Months and 12 Months for INR Exports
This is the change most exporters should note first.
The January 2026 text had a longer period. It was 15 months, and 18 months for specified rupee exports. Then RBI issued an amendment on 22 September 2026. The period was cut down to 9 months. For specified INR-invoiced or INR-settled exports, it is now 12 months.
The clock starts at different points:
- Goods: from the date of shipment
- Services: from the date of invoice
- Goods sent to an overseas warehouse: from the date of sale
Your Authorised Dealer (AD) bank can extend the period. You must give reasons, and the bank must be satisfied with them.
Many articles online still show the older 15-month figure. Please check your systems. They should not run on the old number.
What is the Export Declaration Form (EDF)?
EDF is the form used to declare exports. Under the new rules, it covers services too.
For services, you must file the EDF within 30 days from the end of the month in which the invoice is raised. If you serve many clients in one month, one EDF can cover all of them.
For services other than software, the EDF can also be filed on or before the date you receive payment. Your AD bank may allow more time if you have a valid reason.
Software and Service Exports: SOFTEX to EDF
Software is now clearly part of “services”. So software exporters move from the SOFTEX process to the EDF process.
Depending on your location, the specified authority can be your AD bank, STPI in the domestic area, or the Development Commissioner in an SEZ.
If you export software, plan this shift early. Update your internal process before 1 October.
₹10 Lakh Threshold: Simplified EDPMS & IDPMS Closure
Small transactions now get an easier path.
If a shipping bill, bill of entry or invoice is up to ₹10 lakh, the entry can be closed on your declaration. For exports, you declare that payment was realised. For imports, you declare that payment was made.
You can submit these declarations every quarter in bulk. This saves time for businesses with many small transactions.
Import Payment Rules: Contract-Based Timelines
Import payments now follow the timeline in your contract. Your AD bank tracks the entry in IDPMS and follows up if payment is due.
If you cannot pay on time, you can ask for an extension. Give clear reasons. The bank decides whether to allow it.
Contract terms give you flexibility. But monitoring does not disappear. Reporting still applies.
Set-Off of Export Receivables Against Import Payables
Set-off is now clearly permitted under Regulation 7. You can adjust export money against import dues.
This works with the same overseas buyer or supplier. It also works with their group or associate companies. The set-off must happen within the realisation period, or within an extended period allowed by the AD bank.
Groups with two-way trade will find this useful.
Third-Party Receipts and Payments
Sometimes, a payment comes from or goes to someone other than the contracting party. The new rules recognise this openly.
The AD bank must be satisfied that the transaction is genuine. So keep proof ready:
- The underlying contract or invoice
- The link between the parties
- The reason for the third-party payment
- A clear trail to the invoice
Advance Payments for Exports and Imports
If you receive an advance for an export, route it and the later payment through the same AD bank. You can use another AD bank, but you must inform the banks as required.
Advance payments for imports also need the bank’s involvement. The bank examines the request under the rules and its own policy.
Role of Authorised Dealer (AD) Banks
Banks now carry more responsibility. Each AD bank must frame its own policy and standard procedures for these transactions.
This means your bank’s internal rules will matter in practice. Ask your bank for its updated checklist. Do it early.
Merchanting Trade Under the New Framework
Merchanting trade now sits inside the same rulebook. Earlier, it had separate guidelines.
If your business buys goods from one country and sells to another without bringing them to India, review these transactions separately.
Transitional Provisions for Existing Transactions
The amendment also covers older cases.
- Exporters on the Caution List as on 30 September 2026 stay under the earlier orders until removed
- AD banks can now handle certain pre-1 October 2026 transactions that earlier needed RBI approval
Sort your transactions into three groups. Those completed before 1 October. Those open on that date. And those starting after it.
Impact on IT, Software and Service Exporters
Service exporters feel the change the most.
- Invoice date matters: the 9-month clock starts from it
- EDF filing needs a process: set reminders inside your team
- Software exporters must plan the shift from SOFTEX
- Monthly reconciliation helps: match invoice, EDF, bank receipt and EDPMS entry
Compliance Checklist Before 1 October 2026
- List all export and import transactions still open
- Separate pre-October and post-October transactions
- Review export invoices pending payment
- Set the 9-month alert (12 months for specified INR exports)
- Review your SOFTEX process and plan the EDF shift
- Reconcile EDPMS and IDPMS entries
- Match bank receipts with invoices
- Document third-party payments
- Review set-off arrangements
- Get your AD bank’s updated policy or checklist
- Update ERP and treasury alerts
- Train the finance and export teams
Common Mistakes Businesses May Make
- Using the old 15-month timeline in their systems
- Ignoring the EDF filing deadline for services
- Forgetting to reconcile EDPMS and IDPMS regularly
- Making third-party payments without proper documents
- Not checking the AD bank’s own procedure
- Mixing up old and new transactions
Why Choose FEMA Expert for Export-Import FEMA Compliance
At FEMA Expert, we help businesses prepare for changes like these. We review your open transactions. We check your timelines. We set up simple tracking so nothing slips.
Our FEMA advisory team works with exporters, importers and service companies. Our RBI and LRS remittance consultant services also support cross-border payment questions.
Not sure how the new rules affect your business? Talk to FEMA Expert before 1 October.
Conclusion
The new FEMA rules make trade compliance simpler in some ways. They also demand more discipline. The shorter realisation period, the EDF process and the bigger role of banks need your attention now.
Rules of this kind can change again. So check the latest RBI notification before you act. If you want help, FEMA Expert’s team is ready.
(FAQs)
1. What are the FEMA export import regulations 2026?
It is RBI’s combined rulebook for exports and imports of goods and services. It comes into force on 1 October 2026.
2. What is the export realisation period under the new rules?
It is 9 months. For specified INR-invoiced or INR-settled exports, it is 12 months.
3. When does the period start?
For goods, it starts from shipment. For services, from the invoice date. For overseas warehouse goods, from the date of sale.
4. What is the Export Declaration Form (EDF)?
It is the form used to declare exports. Under the new rules, it also covers services, including software.
5. Does SOFTEX still apply to software exports?
Software exporters move to the EDF process under the new framework.
6. What is the ₹10 lakh rule?
For transactions up to ₹10 lakh, EDPMS and IDPMS entries can be closed using a declaration. Bulk quarterly declarations are allowed.
7. Can export receivables be set off against import payables?
Yes. Regulation 7 allows it with the same overseas party or its group or associate companies.
8. How can FEMA Expert help?
We review your transactions, set up tracking, and support your filings and bank coordination.
