Rupee Export Realisations & FTP Benefits
Aligned with FEMA
The amendment gives greater
regulatory recognition to Indian Rupee settlement of exports, allowing
eligible rupee-realised exports to receive FTP incentives/benefits and count
towards Export Obligations on par with foreign-currency exports, subject
to RBI/FEMA requirements.
·
Para 2.52 – Denomination of
Export Contracts
o
Export contracts and invoices may
generally be denominated in foreign currency or Indian Rupees.
o
Exception:
Contracts involving ACU member countries, other than Nepal and Bhutan,
must be denominated in a currency determined by the Asian Clearing Union
(ACU).
o
Such ACU transactions may also be
denominated and settled in accordance with RBI directions.
o
Export contracts involving Nepal
and Bhutan will be denominated and settled in Indian Rupees, or as
per RBI directions.
o
Contracts/invoices under EXIM
Bank/Government of India Lines of Credit may also be denominated in Indian
Rupees.
o
The earlier detailed conditions
relating to Vostro accounts, freely convertible currencies and ACU Dollar/Euro
have accordingly been replaced.
·
Para 2.53 – Eligibility for FTP
Export Benefits
o
Export realisations in Indian
Rupees will continue to qualify for export benefits, incentives and
fulfilment of Export Obligations under FTP.
o
The revised provision extends
this treatment to exports to any country other than Nepal and Bhutan,
where rupee proceeds are realised through banking channels by credit to Indian
Rupee accounts of persons resident outside India, maintained in accordance
with the Foreign Exchange Management (Deposit) Regulations.
o
Such rupee realisations will be
eligible at par with export realisations in foreign currency for FTP
benefits and Export Obligation fulfilment.
o
Exports to Iran remain
subject to compliance with Para 2.19 of FTP 2023.
·
Key policy change: The
notification effectively broadens the acceptance of INR-based export
realisations for availing FTP benefits, while linking the treatment to the
prevailing FEMA/RBI framework.
·
Purpose: To align
FTP provisions on denomination of export contracts and eligibility for FTP
benefits against rupee export realisations with the Foreign Exchange
Management (Manner of Receipt and Payment) Regulations, 2023.
·
Effective: Immediate
effect from 20 August 2026.
[DGFT Notification No. 30/2026-27
dated 20 August 2026]
Effect of this Notification:
Paras 2.52 and 2.53 of the Foreign Trade Pol icy (FTP) 2023 have been amended
to align the provisions relating to denomination of export contracts and
eligibility for FTP benefits in respect of export realisations in Indian Rupees
with the Foreign Exchange Management (Manner of Receipt and Payment)
Regulations, 2023.
Subject: Amendment in Para 2.52 and 2.53 of
FTP 2023
S.O.(E): In exercise of powers conferred by Section 3 and
Section 5 of Foreign Trade (Development &Regulation) Act, 1992, read with
paragraph 1.02 and 2.01 of the Foreign Trade Policy 2023, as amended from time
to time, the Central Government hereby makes the following amendments relating to
Para 2.52 and 2.53 of the Foreign Trade Policy (FTP), 2023, with immediate
effect:
|
Para No. |
Existing Para |
Revised Para |
|
2.52: Denomination of
Export Contracts |
(a)
All export contracts and invoices must
be denominated either in freely convertible currency or Indian rupees, but
export proceeds must be realized in freely convertible currency. (b)
Export proceeds for specific exports may
also be realized in rupees, provided: It is through a
freely convertible Vostro account of a non-resident bank situated in a
country other than an ACU member, Nepal, or Bhutan. Rupee payment via
Vostro account must be correspond to free foreign currency payment by the
buyer in their non-resident bank account. The Free foreign
exchange remitted by buyer to their non-resident bank (after deducting bank
service charges) will count as export realization under FTP export promotion
schemes. (c) Contracts
settled through the ACU must be denominated in ACU Dollars, although
transactions may be settled in ACU Dollar or ACU Euro per RBI notifications.
The Central Government may relax these provisions when appropriate. Export contracts
and invoices can be denominated in Indian rupees under an EXIM
Bank/Government of India line of credit. (d) Invoicing,
payment and settlement of exports and imports in INR are also permitted
subject to compliances with RBI’s A.P. (DIR Series) Circular No.10 dated July
11, 2022, INR trade transactions must follow these guidelines: (i) Indian importers must pay in INR, credited
into the Special Vostro account of the correspondent bank of the partner
country, against invoices for goods or services from the overseas seller/supplier. (ii) Indian exporters must receive export
proceeds in INR from balances m the designated Special Vostro account of the
correspondent bank of the partner country. |
(a) All
export contracts and invoices, other than those involving member countries of
the Asian Clearing Union (ACU), shall be denominated either in foreign
currency or Indian Rupees. Export proceeds shall be realized either m any foreign
currency or in Indian Rupees. (b) Export
contracts involving member countries of the ACU, other than Nepal and Bhutan,
shall be denominated in a currency determined by the ACU. However, such
transactions may also be denominated and settled in accordance with the
directions issued by the Reserve Bank of India from time to time. (c) Export contracts involving Nepal and Bhutan
shall be denominated and settled in Indian Rupees, or in accordance with the
directions issued by the Reserve Bank of India from time to time. Further,
export contracts and invoices under EXIM Bank/Government of India Lines of
Credit may also be denominated in Indian Rupees. |
|
2.53: Applicability of FTP
Schemes for Export Realisations in Indian Rupees |
i. Export proceeds realized m Indian Rupees
against exports to Iran are permitted to avail exports benefits I incentives/ fulfilment of Export
Obligations under the FTP, at par with export proceed s realized in freely
convertible currency subject to compliance of para 2.19 of the FTP. ii. Export proceeds realized ion Indian Rupees
as per para 2.52(d)(ii) are permitted to avail exports benefits / incentives
/ fulfillment of Export Obligations under the FTP |
Exports
to any country, other than Nepal and Bhutan, for which export proceeds are
realized m Indian Rupees through banking channels by credit to Indian Rupee
accounts of persons resident outside India, opened m accordance with the
Foreign Exchange Management (Deposit) Regulations, as amended from time to
time, shall be eligible for export benefits/incentives and fulfilment of
Export Obligation under the FTP, at par with exports realized in any foreign
currency. In the case of exports to Iran, the
above provisions shall apply subject to compliance with the provisions of
para 2.19 of the FTP. |
This is issued with the approval of the Minister of
Commerce and Industry.
[Issued from File No. 01/93/180/32/AM-19/PC.Il(B)/E-17430]