In a significant move to support the trade sector, the Reserve Bank of India (RBI) has overhauled foreign exchange regulations to provide more breathing room for exporters. On January 16, 2026, the RBI notified the new Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, which offer a differentiated timeline for realizing export proceeds.
This move is designed to promote the internationalization of the Indian Rupee (INR) while helping exporters navigate global trade disruptions and high tariffs.
New Realization Timelines
The RBI has moved away from the traditional 9-month window, offering two distinct timelines based on the currency of settlement:
- 18-Month Window: Exporters who invoice and settle their transactions in Indian Rupees (INR) now have up to 18 months to bring their money back into the country.
- 15-Month Window: For transactions settled in foreign currencies, the realization period has been set at 15 months (an extension from the previous standard of 9 months).5
Strategic Objectives
The RBI’s decision is driven by three primary goals:
- Promoting the Rupee: By giving an extra 3 months for rupee-based trade, the RBI is incentivizing overseas buyers to accept the INR, allowing Indian exporters to offer more flexible credit terms.
- Trade Stress Relief: Exporters have faced significant pressure due to 50% tariffs imposed by some major trading partners (like the U.S.) since late 2025. The extension helps manage cash flow during these “long payment cycles.”
- Ease of Doing Business: The 2026 regulations empower Authorized Dealer (AD) banks with more discretion to handle routine trade matters, such as allowing extensions or under-realization of values based on genuine reasoning.
Key Highlights of the 2026 Regulations
Beyond the realization period, the new “principle-based” framework introduces several other relief measures:
| Feature | New Regulation (Effective Oct 1, 2026) |
| Small-Value Entries | Entries up to ₹10 lakh can be closed via self-declaration by the exporter. |
| Advance Payments | Exporters have up to 3 years to ship goods after receiving advance payment. |
| Service Exports | Software and service exporters now have a defined 30-day window to file declarations. |
| Penal Charges | Banks are directed not to levy penal charges for regulatory delays on small-value transactions. |
| Monitoring | Future exports will require an Irrevocable Letter of Credit if dues remain unpaid for >1 year after the 15/18-month deadline. |
Timeline for Implementation
While the notification was issued in January 2026, these comprehensive new FEMA rules are set to officially come into force on October 1, 2026. However, the specific 15-month extension for foreign currency realization was initially signaled as a “lifeline” in late 2025 to combat immediate tariff stress.
