Summary: Indian exporters of goods, services and software are required to realise and repatriate export proceeds within the period prescribed under FEMA and the applicable Reserve Bank of India regulations. The Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, effective from 1 October 2026, prescribe a general nine-month period for export realisation, with a twelve-month period for exports invoiced or settled in Indian Rupees. Exporters must monitor outstanding receivables through their authorised dealer banks and the Export Data Processing and Monitoring System (EDPMS). Delayed or unrealised export proceeds can attract regulatory scrutiny and restrictions on further transactions. The regulations provide flexibility for genuine commercial difficulties through extensions, permitted reductions or write-offs, and set-off of export receivables against import payables, including qualifying transactions involving overseas group or associate companies. Exporters receiving advance payments must also comply with applicable documentation and reporting requirements. Outstanding receivables from associated enterprises can additionally create transfer pricing concerns, particularly where prolonged credit periods differ from arm’s length commercial arrangements. Businesses should maintain invoice-wise ageing reports, reconcile banking records with export declarations, document recovery efforts, obtain necessary bank approvals and examine compounding where contraventions have occurred. Regular monitoring and timely communication with authorised dealer banks are essential for avoiding unnecessary FEMA compliance risks.
Introduction
Indian exporters of goods and services, including captive units and software companies, must bring the export proceeds into India within a set period. Delay is a common problem for group companies, where the foreign group entity pays late or nets the amount against other balances. The rules allow some flexibility, but they have conditions.
The basic rule
Under the Foreign Exchange Management (Export of Goods and Services) Regulations and the related RBI directions, an exporter has to realise and repatriate the full export value within nine months from the date of export, unless the period is extended. For services, the date of export is generally tied to the invoice date or the completion of the service. RBI has revised its framework in recent years, so check the current direction before relying on the nine-month period or on the extension limits in this note.
Monitoring through the bank
The authorised dealer bank follows each export through the Export Data Processing and Monitoring System, matching shipping bills or invoices and inward remittances. Unmatched items are reported as outstanding after the period expires. Persistent outstanding items can lead to restrictions on further exports and to questions from the bank.
Extension, write-off and set-off
Extension. The authorised dealer may extend the period in genuine cases, with reasons and, depending on the amount and age of the dues, supporting documents. Longer delays may need RBI permission.
Write-off. Where the amount cannot be recovered, an exporter can seek a write-off through the bank within the limits and with evidence of recovery efforts.
Set-off. Export receivables can be set off against import payables to the same party, subject to conditions on documents and approvals.
Group company issues
Netting of exports and imports with an overseas affiliate is allowed only as set out in the rules, and the net position must be reported.
Advance receipts have their own tracking requirement, so the date of the advance and the date of export both matter.
Delays can also raise transfer pricing questions, because an arm’s length party would charge interest on a late receivable.
Practical steps
Review the export receivable ageing every month against the nine-month limit.
Ask the bank for extension before the period expires, not after.
Keep invoices, contracts and correspondence with the customer in a form that can be sent to the bank.
Compounding is available for contraventions, but it costs time and money, which is the reason to track dues in advance.
The rules are not heavy to follow, but they are strict on dates. A short monthly review prevents most of the problems.
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Author bio
N. Sudheer, M.Com., FCS, LL.B., Partner at A2 Consultants
