The Reserve Bank of India (RBI) on Monday announced an amendment to the Foreign Exchange Management Act (FEMA) regulations, allowing exporters with foreign currency accounts in Gujarat’s GIFT City to retain foreign exchange proceeds for up to three months.
The move comes after the central bank last week extended the repatriation period for foreign currency accounts maintained in India’s International Financial Services Centre (IFSC) from one month to three months. However, the repatriation timeline remains unchanged for accounts held in other international jurisdictions.
Before these changes, exporters with foreign currency accounts abroad were required to repatriate funds by the end of the following month or use them for import payments. The new provision allows similar flexibility for accounts opened in the IFSC, aligning them with global operational practices.
“This amendment provides operational relief to exporters, who face a long list of FEMA compliances. It also allows them more flexibility to time repatriation according to USD-INR trends,” said Dilip Parmar, research analyst at HDFC Securities.
Foreign currency accounts permitted to be opened abroad can now also be maintained in India’s IFSC, offering exporters greater choice and strategic advantage in managing foreign exchange flows.