FEMA Export-Import Regulations 2026: 9-Month Rule

If you sell goods, software or services to customers outside India, a new RBI rulebook now decides how long you have to bring that money home. The Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 apply from 1 October 2026. For most founders the biggest change is the clock: export proceeds must now be realised within nine months, down from fifteen.

This guide explains what changed, who is affected and what to do about it. It is based on the RBI notifications and the law-firm summaries listed under Sources at the end.

Quick summary

The new regulations apply from 1 October 2026. They replace the 2015 export regulations and also cover imports and merchanting trade.
Export proceeds must be realised within 9 months. For exports invoiced or settled in rupees, the limit is 12 months. The earlier limits were 15 and 18 months.
Services and software exporters file an Export Declaration Form (EDF) within 30 days after the end of the month in which the invoice is raised.
Authorised Dealer (AD) banks get more room on set-offs, third-party payments and small-value closures, within their own policies.
Money that stays unrealised for more than a year after the due date can force you to export only against advance payment or a letter of credit.

What changed and when

13 January 2026: RBI notified the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (Notification No. FEMA 23(R)/2026-RB). They come into force on 1 October 2026 and replace the 2015 regulations.
22 September 2026: RBI amended them through Notification No. FEMA 23(R)/(1)/2026-RB, published in the Gazette on 24 September 2026 and effective 1 October 2026. In Regulation 5(1) the words "fifteen months" are replaced by "nine months", and in the first proviso "eighteen months" is replaced by "twelve months".
5 June 2026 (interim step): A separate amendment reportedly applied the 9-month period under the old 2015 rules to exports dated 5 June to 30 September 2026.

If you have shipments or invoices from before 1 October 2026, ask your AD bank which period applies to each one before you assume either 9 or 15 months.

The new deadline for bringing export money home

"Realisation" means the export payment has actually reached your bank account in India. The time limits are now:

Goods: 9 months from the date of shipment.
Services, including software: 9 months from the invoice date.
Exports invoiced or settled in Indian rupees: 12 months.
Project exports: as per the payment terms in the contract.

Your AD bank can extend the period if you make a reasoned request. Do not treat an extension as automatic. Ask early, with documents.

Example: You invoice a client in the US for software development on 15 November 2026. Payment should reach your account by 15 August 2027. If the same invoice is raised in rupees, the limit is 15 November 2027.

Software now sits inside the same framework as services. According to TaxGuru's summary of the text, software supplied on a physical medium is treated as goods instead.

The Export Declaration Form (EDF)

Goods: The EDF is filed at the time of export. At ports on the electronic data interchange (EDI) system, it is treated as filed through the shipping bill.
Services and software: The EDF is due within 30 days from the end of the month in which the invoice is raised. One monthly EDF can cover all your export invoices for that month, even across several customers.
Who receives it: For services this is usually your AD bank. According to TaxGuru's summary, software exporters may also file through STPI.
Free-of-cost goods: These are reported with a nil-value EDF.

In practice, add the monthly EDF to your month-end accounts routine so that it is never missed.

Changes that give exporters more flexibility

The new rules remove several conditions that used to need RBI approval or bank-specific workarounds. Based on the summaries we reviewed:

Reducing the export value: There is no longer a fixed 25% cap on how much an invoice value can be reduced. Your bank can allow a reduction on a reasoned request.
Small amounts: For values up to ₹10 lakh, banks can act on the exporter's declaration instead of asking for detailed proof.
Set-off: Banks may allow export receivables to be set off against import payables with the same overseas party or its group companies, within the realisation period.
Third-party payments: Payments from or to a third party are possible if the bank is satisfied that the transaction is genuine.
Advances: Advance receipts for exports and advance payments for imports should go through the same AD bank. If you change banks, both must be informed.

Each AD bank frames its own internal policy for these items, so the experience can differ from one bank to another. Ask yours for its written policy.

What importers need to know

Payment timelines: There is no fixed period any more. The payment period in your contract governs, with extensions on a reasoned request. This replaces the earlier six-month norm.
Advance payments: The earlier USD 200,000 threshold is removed. Banks set their own limits and may ask for a standby letter of credit or a bank guarantee above them. Interest on advances is capped at the trade-credit ceiling under FEMA borrowing and lending rules.
Gold and silver: Advance remittances for these imports are not allowed.
Advances that do not result in imports: If an advance is not brought back within the contract or extended period, future advances from that importer need a standby letter of credit or a guarantee.

Merchanting trade

In merchanting trade you buy goods from one overseas party and sell to another without the goods entering India. The gap between the outward and inward payments can now be up to six months, extendable by the bank. Third-party receipts and payments are allowed on a reasoned request. The two legs need not go through the same bank.

What happens if export money does not arrive

According to TaxGuru's summary of the regulations, if proceeds stay unrealised for more than one year after the due date (or the extended date), the exporter can export further only against full advance payment or an irrevocable letter of credit. The restriction applies to the exporter, not only to the buyer who defaulted.

Two transition points are confirmed in RBI's September amendment:

Exporters who were on the RBI Caution List as of 30 September 2026 stay under their existing RBI orders until they are removed from the list (the proviso to Regulation 13).
Under the new Regulation 20, AD banks can handle export, import and merchanting transactions from before 1 October 2026 that earlier needed RBI approval.

This guide does not cover penalties or compounding for delayed realisation. If a deadline is at risk, speak to your bank and a FEMA adviser before it passes.

A practical checklist for startups and freelancers

List every open export invoice and mark its nine-month date (twelve for rupee invoices).
Set a reminder at month six so you can chase payment or ask for an extension in time.
If you export services or software, build a monthly EDF routine within 30 days of month end.
Check the payment terms in your contracts. Terms longer than nine months now need a plan.
Ask your AD bank for its policy on extensions, set-off, third-party receipts and small-value closures.
Where buyers agree, consider invoicing in rupees to get the 12-month window.
If you import, align advance payments and payment schedules with the contract, and ask your bank about its advance limits.
Keep invoices, contracts, bank advices and correspondence together for each export.

Frequently asked questions

Does the 9-month rule apply to service and software exports?

Yes. For services, the nine months are counted from the invoice date. Software is treated within the same framework.

Can I get more than nine months?

Possibly. Your AD bank can extend the period on a reasoned request. It is a bank decision, so apply well before the deadline.

Is invoicing in rupees a way around the deadline?

No. It gives a longer limit of 12 months, not an exemption.

Do the new rules apply to shipments made before 1 October 2026?

It depends on the transaction. Regulation 20 lets banks handle older transactions that needed RBI approval, and exporters on the Caution List as of 30 September 2026 stay under existing orders. For everything in between, ask your AD bank which period applies to your invoice.

Are the rules final?

They are notified and in force from 1 October 2026, but RBI has already amended them once. Check RBI's FEMA notifications page for further changes.

This article is general information and not legal advice. Rules and bank practices change, so confirm the position for your own transactions with your bank or a FEMA professional.

Exporting services or software and not sure your invoicing and bank reporting are in order? Talk to the StartupKaro team about your set-up.

Sources

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RBI's New Export-Import Rules (FEMA 2026): The 9-Month Deadline and What Exporters Must Do