Ministry of Finance notifies new Foreign Exchange Rules in pursuance of Union Budget 2024-25 announcement

In pursuance of the Union Budget 2024-25 announcement by Union Minister for Finance and Corporate Affairs Nirmala Sitharaman to simplify rules and regulations for Foreign Investments, the Department of Economic Affairs (DEA), Ministry of Finance, has notified the Foreign Exchange (Compounding Proceedings) Rules, 2024 under powers given under section 46 read with section 15 of the Foreign Exchange Management Act (FEMA), 1999. The amended Rules will supersede the existing Foreign Exchange (Compounding Proceedings) Rules, which were issued in 2000.

As part of a broader initiative to streamline and rationalize existing rules and regulations to further facilitate ease of doing business, the compounding proceeding rules were comprehensively reviewed in consultation with the Reserve Bank of India. The emphasis has been on enabling provisions to expedite and streamline the processing of compounding applications, introduction of digital payment options for application fees and compounding amounts, and a focus on simplification and rationalization of the provisions to eliminate ambiguity and clarify the process.

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