RBI draft directions for exports envisage more powers to authorised dealers

The Reserve Bank of India (RBI) has issued the draft direction on the export and import of goods and services, and the draft Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2025, for comments or feedback from stakeholders before the end of this month. The RBI has also launched the Platform for Regulatory Application, Validation and Authorisation (PRAVAAH), through which online applications for regulatory authorisations, licenses, and approvals should be submitted. 

In a significant departure from the practice of giving detailed guidelines, the draft direction merely provides a list of RBI regulations that authorised dealers (ADs) must follow. It further states that ADs should ensure adherence to the extant Foreign Trade Policy as well as the guidelines issued by the Government of India related to export and import transactions, and merchanting trade transactions (MTT). ADs are also required to send all references to the RBI through the PRAVAAH portal and inform any doubtful transaction to the Directorate of Enforcement.   

The draft regulations require ADs to put in place within six months a separate, internal policy document for handling transactions (including the reporting thereof) related to export and import of goods and services as well as MTT and on dealing with grievances and appeals against any decisions. The monitoring of payments through the Export Data Processing and Monitoring System (EDPMS) and Import Data Processing and Monitoring System (IDPMS) will continue. The time limits for realisation of export proceeds, submission of documents to ADs after exports, remittance for imports etc. more or less remain the same with powers to ADs to grant extensions. 

In MTT, the period between the outward remittance and inward remittance is being raised to six months. Exports will be allowed only against full advance or irrevocable letter of credit for any exporter who fails to realise the export proceeds within 24 months from the due date (including extensions) and whose cumulative unrealized export outstanding exceeds ₹25 crore. Any importer whose imports against advance remittances have not materialized and such remittances have not been repatriated and whose cumulative import advances exceed ₹25 crore cannot remit advances for imports except against irrevocable standby letter of credit or a bank guarantee. 

Quite obviously, RBI does not want to micro-manage and wants to let ADs decide on most issues such as extension in the period for realisation of export proceeds or import payments, reduction in the amount of export proceeds to be realised, monitoring project exports and so on. So, each AD might use the discretion to offer easier terms and attract business, which could mean that similar transactions will get different treatment by different ADs. Whether that is desirable in matters concerning enforcement of regulations is a moot point.  

The trade will welcome the direction that ADs shall levy reasonable charges for handling transactions and shall not levy any charges/penalty for any regulatory delay/violation. Exporters will be relieved that the draft regulations do not mandate surrender of proportionate export incentives in case of shortfall in realisation of export proceeds. However, there would be disappointment that the RBI asks the ADs to police each and every import and export transaction. SEZ units will be surprised that they will have to submit the export declaration forms to the development commissioners. Service providers will be peeved that a copy of every invoice will have to be submitted to the specified authorities.   

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