RBI permits Indian exporters to maintain Foreign Currency Account with bank Outside India

Notification No. FEMA 10(R)(5)/2025-RB; Dated: 14.01.2025

The Reserve Bank of India has notified the FEM (Foreign Currency Accounts by a Person Resident in India) (Fifth Amendment) Regulations, 2025. In regulation 5, after sub-regulation (C), a new sub-regulation (CA) has been added. The newly notified norms allow Indian Exporters to open, hold, and maintain a foreign currency account with a bank outside India. The account can be opened to realise the full export value and advance remittance received by exporters for the export of goods or services.

Further, the funds in this account may be utilised by the exporter for the following purposes:

(a) Paying for its imports into India

(b) Repatriated into India within a period not exceeding the end of the next month from the date of receipt of the funds after adjusting for forward commitments.

However, it is to be noted that the exporter must comply with the realisation and repatriation requirements as specified in the FEM (Export of Goods and Services) Regulations, 2015 (realization of full exports value within nine months or within such period as may be specified by RBI and submission of related documentation with RBI).

Comment: This will enable the exporters to make payments against imports in foreign currencies without conversion of Indian Rupee to foreign currencies as well as cost saving in terms of conversion charges/ conversion rates considered by the Indian banks.