India narrows service-export and import reporting under FEMA

Gazetted amendment applies from 1 October

Notification FEMA 23(R)/(2)/2026-RB was published in the Official Gazette on 2 November and applies from 1 October 2026. It amends the Foreign Exchange Management (Export and Import of Goods and Services) Regulations 2026. The change concerns foreign-exchange reporting routes for services, rather than an income-tax, GST or withholding-tax rate.^[1][3]

Deemed EDF submission for service exports

A resident individual is now deemed to have submitted the Export Declaration Form when they give the authorised dealer the information needed to credit payment to their account. The same route applies to an exporter other than a resident individual where the inward remittance for the service does not exceed INR 1 million, or its foreign-currency equivalent. Other service exporters remain within the general rule requiring an EDF within 30 days after the end of the invoice month.^[1][2]

Narrower IDPMS entry rule

An authorised dealer must enter a service import in the Import Data Processing and Monitoring System within five working days after receiving the details only where the importer is not a resident individual and the invoice or contract value exceeds INR 1 million, or its foreign-currency equivalent. This replaces wording that required the dealer to enter service-import details within five working days after receiving the documents without those two conditions.^[1][2]

Wider dealer controls remain

The reduced reporting perimeter does not remove the authorised dealer's wider controls. The consolidated regulations still require the dealer to check that a transaction is genuine, update or close EDPMS or IDPMS entries when an account is credited or debited, monitor outstanding entries and report foreign-trade transactions through FETERS. Groups should therefore avoid treating the thresholds as an exemption from all foreign-exchange evidence.^[2]

Reconcile the retrospective start date

Indian group entities should identify service receipts and payments processed since 1 October, distinguish resident individuals from other persons and separate transactions at or below INR 1 million from those above it. They should ask their authorised dealer whether entries submitted between 1 October and publication on 2 November require reconciliation and update treasury and accounts-payable procedures. The amendment does not prescribe that correction process.^[1][2]