POLICY ON EXPORTS

A. General

Export trade from India is regulated by the Directorate General of Foreign Trade (DGFT) and its regional offices, functioning under the Ministry of Commerce and Industry, Department of Commerce, Government of India. The policies and procedures required to be followed for exports from India are announced by the DGFT from time to time.

As an Authorised Dealer — Category I, the Bank conducts export transactions in conformity with the Foreign Trade Policy in force, the Rules framed by the Government of India, and the Regulations and Directions issued by the Reserve Bank of India from time to time. The provisions of this Part shall be read together with the Governing Regulations and Directions set out in Para 3 of this Policy.

Where specific regulations do not exist, Bank may be governed by normal trade practices.

"Financial Year" (April to March) is reckoned as the time base for all transactions pertaining to trade related issues.

This Section deals only from a FEMA standpoint. Extant guidelines on Credit matters and approval therein, if any, shall be complied with.

The Delegation of Power shall be adhered to before processing the transactions.

Sl. No.	Section
A.1	Declaration for Exports — EDF Procedure
A.2	Manner of Receipt of Export Proceeds
A.3	Realisation of Exports
A.4	Receipt of Advance for Exports
A.5	Extension of Time Period
A.6	Reduction in Export Value Above ₹10 lakh
A.7	Handling of Shipping Bills up to ₹10 lakh
A.8	Third-Party Receipts
A.9	Set-off of Export Receivables against Import Payables
A.10	Export of Goods and Services against Repayment of State Credits
A.11	Project Exports
A.12	Export Factoring
A.13	International Trade Invoicing and Settlement in Indian Rupees (INR)
A.14	UNREALISED EXPORTS
A.15	REPORTING UNDER EDPMS AND OTHER REPORTING SYSTEMS

A.1 — DECLARATION FOR EXPORTS — EDF PROCEDURE

A.1.1 Regulatory Position

Regulation 3 of the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (FEMA 23(R)/2026-RB) requires,

(1) An exporter of goods shall furnish to the specified authority, a declaration in the Export Declaration Form (EDF) specifying the amount representing the full export value of goods, at the time of export:

Provided that the EDF will be deemed to be submitted as part of shipping bill for goods exported through Electronic Data Interchange (EDI) port;

Provided further that a traveller moving personal effects (which are either accompanied or unaccompanied) from India shall not be treated as exporter for the purpose of these Regulations.

(2) An exporter of services shall furnish to the specified authority, a declaration in EDF specifying the amount representing the full export value of services, within 30 days from the end of month in which invoice for services has been raised, provided that:

(a) the exporter of services who has exported services to one or more recipients in a month, may submit a single EDF for all such exports;

(b) the exporter of services other than software, may submit an EDF on or before the date of receipt of payment;

(c) the Authorised Dealer may, on a request from the exporter citing reasons for delay, extend the period for submission of the EDF after satisfying itself about the reasonableness of the request.

(3) In the case of a non-EDI port for export of goods; or where the specified authority for export of services is other than an Authorised Dealer, the duly authenticated EDF, shall be forwarded by the specified authority to the respective Authorised Dealer.

A.1.2 EDF filing for different modes of exports:

(a) Goods exported through EDI-enabled Customs ports — the EDF is filed electronically through the Shipping Bill on ICEGATE, and the data flows to EDPMS through the Customs–RBI interface without AD Bank intervention at the filing stage.

(b) Goods exported through non-EDI Customs ports — the exporter furnishes the physical EDF to the Commissioner of Customs, who authenticates and forwards it to the AD Bank.

(c) Goods exported through Foreign Post Office (FPO) or Courier — the exporter submits the EDF to the AD Bank for certification prior to despatch.

(d) Export of services (other than software) — the exporter submits the EDF to the AD Bank for certification.

(e) Export of software (including through STPI / SEZ units) — the exporter submits the EDF to the AD Bank or Software Technology Parks of India (STPI) in the DTA, and to the Development Commissioner of the Special Economic Zone in the SEZ, for certification.

Under the 2026 Regulations, the EDF is the single, unified declaration form prescribed for all exports — of goods, of services, and of software.

Specified Authority under Regulation 2 for signing / authenticating the EDF is:

(i) the Commissioner of Customs in the Domestic Tariff Area (DTA) and the Development Commissioner of the Special Economic Zone in the SEZ — for goods;

(ii) the AD Bank in the DTA and the Development Commissioner in the SEZ — for services other than software; and

(iii) the AD Bank or Software Technology Parks of India (STPI) in the DTA, and the Development Commissioner in the SEZ — for software.

A.2 — MANNER OF RECEIPT OF EXPORT PROCEEDS

A.2.1 Regulatory Position

Regulation 4 of the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (FEMA 23(R)/2026-RB) provides that

(1) the receipts for export of goods and services shall be in the manner specified in the Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2023, as amended from time to time.

(2) An Authorised Dealer shall make a credit to the account of an exporter, for receipt of export, only after having satisfied itself of the genuineness of the transaction, and shall, simultaneously close or update the respective entry in Export Data Processing and Monitoring System (EDPMS)*

(* EDPMS shall also refer to any other system specified by RBI, for the purpose.)

Provided that in the case of export where the shipping bill (for goods) or invoice (for services) is up to ₹10 lakh (or its equivalent in foreign currency), entry in EDPMS may be closed based on a declaration from the exporter to the effect that the payment against the shipping bill / invoice has been realised either in full or otherwise. Alternatively, such declaration may be submitted by an exporter to the Authorised Dealer on a quarterly basis for bulk closure of entries in EDPMS;

A.2.1.1 Manner of Receipt

The receipt of export proceeds by a person resident in India from a person resident outside India shall be made through an Authorised Bank in the manner set out below:

(i) Nepal and Bhutan — In Indian Rupees provided that in case of exports from India where the importer in Nepal has been permitted by the Nepal Rashtra Bank to make payment in foreign currency, such receipts towards the amount of the export may be in foreign currency.

(ii) Member countries of the Asian Clearing Union (ACU), other than Nepal and Bhutan — In respect of payments from a resident in the territory of one participant country to a resident in the territory of another participant country, through ACU mechanism, or as per the directions issued by the Reserve Bank to authorised dealers from time to time. For all other transactions, receipt and payment may be made in a manner as specified at point number (iii)

(iii) Countries other than member countries of the ACU — in Indian Rupees or in any foreign currency.

Notwithstanding anything contained in this sub-regulation, receipts may also be made in a manner as may be provided in the extant Foreign Trade Policy framed by the Central Government.

A.2.1.2 Settlement through the ACU Mechanism

Trade transactions with ACU member countries are to be settled through the Bank's ACU Dollar or ACU Japanese Yen account maintained with the correspondent bank in the participating country. Operations in ACU Euro are suspended until further notice.

The following exemptions apply to the ACU framework:

(a) Trade transactions with Iran (with effect from 27.12.2010), Sri Lanka (with effect from 08.07.2022), and Myanmar are to be settled in any permitted currency outside the ACU mechanism, until further instructions from RBI.

(b) Trade transactions with Maldives may additionally be settled in Indian Rupees and/or Maldivian Rufiyaa, in accordance with the bilateral framework between the RBI and the Maldives Monetary Authority.

A.2.1.3 International Trade Settlement in Indian Rupees (SRVA Mechanism)

With effect from 11.07.2022, the Reserve Bank has put in place an additional arrangement for invoicing, payment and settlement of exports and imports in Indian Rupees. Trade transactions under this arrangement are settled through Special Rupee Vostro Accounts (SRVA) maintained by the Bank for correspondent banks of partner trading countries.

Branches/Offices shall be guided by the Head Office Circulars issued from time to time for the operational process and the list of SRVA accounts maintained by the Bank.

A.2.1.4 Receipts through Payment Aggregators

Processing of export-related receipts through Payment Aggregators shall be in terms of the Reserve Bank's Master Direction on Regulation of Payment Aggregators, as amended from time to time, and the Head Office Circulars issued thereunder from time to time.

A.3 — REALISATION OF EXPORTS

A.3.1 Regulatory Position

Regulation 5 of the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (FEMA 23(R)/2026-RB) governs the time period within which export proceeds shall be realised and repatriated to India, and the obligation of the Authorised Dealer to monitor and follow up with the exporter for realisation within such period.

A.3.1.1 Time Period for Realisation

Under Regulation 5(1), the amount representing the full export value of goods and services — or, where applicable, the reduced export value permitted under Regulation 6 read with Section A.6 and A.7 — shall be realised (including by way of set-off under Regulation 7 read with Section A.9) and repatriated by the exporter within the period specified below:

Category of export	Realisation period	Reckoned from
(a) Goods (other than goods exported to a warehouse outside India)	09 months	Date of shipment
(b) Services	09 months	Date of invoice
(c) Goods exported to a warehouse outside India	09 months	Date of sale of goods from the warehouse
(d) Project exports	As per the payment terms of the contract	—

INR-invoiced or INR-settled exports:

Where the export of goods or services is invoiced or/and settled in Indian Rupees, the period for realisation and repatriation of the full export value shall be twelve months, reckoned as follows:

(i) from the date of shipment, in the case of goods (other than goods exported to a warehouse outside India);

(ii) from the date of invoice, in the case of services; and

(iii) from the date of sale of goods, in the case of goods exported to a warehouse outside India.

A.3.1.2 Extension of the Realisation Period

Regulation 5(1) empowers the Bank that on request by an exporter citing reasons for the delay, allow extension of time for realisation of export proceeds beyond the specified period, if the Authorised Dealer is satisfied of the reasons cited. The framework for extension is set out in Section A.5 — Extension of Time Period.

A.3.1.3 Obligation to Monitor and Follow Up

Under Regulation 5(2), the Authorised Dealer shall put in place systems and processes to monitor and follow up with the exporter to ensure realisation of export proceed within the period specified under Regulation 5(1).

The EDPMS Section, Integrated Treasury Vertical, shall be responsible for putting in place the systems and processes to monitor and follow up with the exporter.

A.3.2. Liquidation of Credit Facilities

Where the realisation of export proceeds involves liquidation of credit facilities availed by the exporter against the underlying export — including pre-shipment credit (Rupee or foreign currency), post-shipment credit, bills discounted or purchased, or any other export finance — the credit guidelines issued by the Head Office from time to time, and the terms of sanction applicable to the exporter, shall be adhered to.

A.4 — RECEIPT OF ADVANCE FOR EXPORTS

A.4.1 Regulatory Position

Regulation 10 of the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (FEMA 23(R)/2026-RB), to the extent it relates to advance receipts for exports, governs two matters: the routing of the advance and the subsequent realisation through the same Authorised Dealer, and the ceiling on interest payable on the advance. These obligations are supplemented by the genuineness verification requirement under Regulation 4(2).

A.4.1.1 Routing of Advance and Subsequent Realisation — Regulation 10(1)

Under Regulation 10(1), an exporter shall, in the case of an advance receipt for export, route the advance amount and the realisation of export proceeds, if any, through the same Authorised Dealer. However, an exporter may route the transactions through any other Authorised Dealer provided the exporter has intimated the change to both the Authorised Dealers.

The routing discipline applies both where the advance fully covers the export value and where it covers only a part of the export value, so that the part-advance leg and the subsequent realisation leg travel through the same Authorised Dealer, unless the exporter has intimated the change to both the Authorised Dealers.

A.4.1.2 Interest on Advance Payment — Regulation 10(4)

Under Regulation 10(4), provides that an exporter, or an importer, as the case may be, shall ensure that interest payable, if any, on advance payment received for export, or on delayed payment for imports, shall not exceed the all-in-cost ceiling of trade credit in terms of the Foreign Exchange Management (Borrowing and Lending) Regulations, 2018, as amended from time to time.

A.4.1.3 Non-performance, Chronic Default, and Referral for DoE Reporting

Under the principle-based framework of the 2026 Regulations, the Bank bears the primary responsibility for ensuring that advances received for exports are utilised for the declared purpose within a reasonable time.

Where, in any individual case, the Bank is satisfied that the advance receipt does not reflect a bona fide export transaction — whether on account of non-performance over an extended period without credible reasons, repeated cancellation of export contracts, chronic default in the exporter's shipment performance, or any other indicator — the matter shall be referred to the Directorate of Enforcement.

A.5 — EXTENSION OF TIME PERIOD:

A.5.1 Regulatory Position

This Section governs extension under FEMA 23(R)/2026-RB:

In respect of goods already shipped or services already invoiced, where realisation has not taken place within the period prescribed under Regulation 5(1). The second proviso to Regulation 5(1) empowers the Authorised Dealer, on request by an exporter citing reasons for the delay, allow extension of time for realisation of export proceeds beyond the specified period, if the Authorised Dealer is satisfied of the reasons cited.

This Section deals with extension only from a FEMA standpoint. Extant guidelines on Credit matters and approval therein, if any, shall be complied with prior to an application for extension being placed before the competent authority under this Section.

A.5.2 Extension of Realisation Period

A.5.2.1 Scope

This sub-section applies to extension of the period for realisation of export proceeds under Regulation 5(1), where:

(i) the goods have been shipped, or in the case of services, the invoice has been raised, and the EDPMS entry is outstanding;

(ii) the realisation period under A.3.1.1, read with any earlier extension on record, has expired or is approaching expiry; and

(iii) the exporter has applied for extension citing reasons for the delay.

A.5.2.2 Conditions Precedent

An application for extension of the realisation period shall be accepted only where:

(i) Written application — a written application from the exporter, citing the reasons for the delay and the expected date of realisation, has been submitted;

(ii) Supporting evidence — documentary evidence in support of the reasons cited is furnished. The reasons for the delay in realisation may be attributable to any of:

(A) the overseas buyer — including the buyer's liquidity difficulties, delay in clearance or acceptance of the goods or services, quality or specification-related disputes, the buyer's own dispute or insolvency, or the buyer's country-side exchange control or externalisation difficulties;

(B) the exporter — including delay in despatch of documents, delay in presentation of the shipping bill or related documents, change in the exporter's own business circumstances affecting realisation, or quality or specification-related claims being addressed by the exporter with the buyer;

(C) external factors — including delay in transportation, port congestion, delay in Customs clearance at the destination, change in India's export policy, change in the overseas jurisdiction's import policy or trade restrictions affecting the transaction, sanctions, force majeure events, or any other external cause beyond the control of the exporter and the overseas buyer.

The documentary evidence in support of the reasons cited may include:

(a) correspondence between the exporter and the overseas buyer evidencing the cause of delay and steps taken for realisation;

(b) amendments or addenda to the underlying export contract, or payment reschedule arrangements agreed with the overseas buyer;

(c) evidence of dispute resolution, quality-related claim, or arbitration proceedings;

(d) evidence of suit filed against the overseas buyer and the current status of proceedings;

(e) evidence of delay in transportation, port congestion, or Customs clearance at the destination;

(f) evidence of change in India's export policy, change in the overseas jurisdiction's import policy or trade restrictions, or sanctions, affecting the transaction;

(g) evidence of externalisation difficulties, exchange control restrictions, or other country-risk events in the buyer's country, issued by the buyer's bank or a competent authority;

(h) evidence of the overseas buyer's insolvency, bankruptcy, or equivalent proceedings issued by a competent authority;

(i) evidence of force majeure affecting performance on either side;

(j) any other documentary evidence that the Bank is satisfied establishes the reasons cited;

(iii) Declaration on realisation — the exporter submits a declaration that the export proceeds will be realised within the extended period;

(iv) KYC and IEC — the exporter is KYC-complied and holds a valid IEC;

(v) Cases under investigation — where the export transaction, or the exporter, is under investigation by the Directorate of Enforcement, the Central Bureau of Investigation, or any other investigating agency, the exporter shall produce a No Objection Certificate from the concerned agency for the Bank to consider the application. In the absence of such a No Objection Certificate, the application shall not be entertained;

(vi) Credit and ECGC compliance — the exporter has complied with the guidelines of the Credit Vertical and, where the underlying export is covered by an ECGC policy or guarantee, the approvals required from ECGC have been obtained, prior to the application being placed before the competent authority under this Section.

(vii) No recurring extension pattern — where the exporter has a pattern of recurring extension applications, enhanced scrutiny shall be undertaken.

A.5.2.3 Extension Period

Each extension shall be granted for a period of up to six months at a time. The exporter may apply for further extensions on the expiry of each extended period, subject to the conditions precedent under A.5.2.2 being satisfied at the time of each application.

A.5.3 Extension of Shipment Period against an Advance Receipt

A.5.3.1 Scope

This sub-section applies where the exporter has received an advance, the shipment of goods or rendering of services has not been completed within one year from the date of advance receipt, and the exporter seeks continuation of the outstanding Inward Remittance Message in EDPMS for a revised shipment period.

A.5.3.2 Conditions Precedent

An extension of the shipment period against an advance receipt shall be permitted only where all of the following are satisfied:

(i) Evidence of overseas buyer's consent — written evidence of the overseas buyer's consent to the deferral of shipment has been obtained. The consent may take the form of:

(a) an amendment or addendum to the original export contract extending the shipment or delivery schedule;

(b) a direct communication from the overseas buyer — by letter, email from the buyer's registered business domain, or a message through a commercial channel acknowledged by both parties — recording the consent to the deferral and the revised shipment or delivery date; or

(c) any other documentary evidence that the Bank is satisfied establishes the buyer's consent;

(ii) Exporter's written application — citing the reasons for the delay, annexing the evidence of buyer consent under (i), and stating the revised shipment or delivery date;

(iii) Genuineness — the processing officer shall be satisfied that the deferral is bona fide, and that the revised shipment period is consistent with the nature of the goods or services and with the original commercial intent of the contract;

(iv) Enhanced due diligence where revised shipment period beyond 01 Years from the date of original advance receipt — where the revised shipment period, reckoned from the date of the original advance receipt, beyond 01 years from the date of original advance receipt, the enhanced due diligence shall be satisfactory as at the date of the extension.

(v) Sanctions and AML screening — the sanctions screening and AML / CFT checks shall be repeated in respect of the exporter and the overseas buyer.

(vi) Interest on the advance — where the advance carries interest, the Bank shall satisfy itself that the continuing interest accrual remains within the all-in-cost ceiling under A.4.1.2;

(vii) Cases under investigation — where the exporter is under investigation by the Directorate of Enforcement, the Central Bureau of Investigation, or any other investigating agency, the exporter shall produce a No Objection Certificate from the concerned agency for the Bank to consider the application. In the absence of such a No Objection Certificate, the application shall not be entertained; and

(ix) No recurring extension pattern — where the exporter has a pattern of recurring extension applications in respect of advance receipts, enhanced scrutiny shall be undertaken.

A.6. REDUCTION IN EXPORT VALUE ABOVE ₹10 LAKH:

A.6.1 Regulatory Position

Regulation 6 of the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (FEMA 23(R)/2026-RB) empowers the Bank, on a request from the exporter citing reasons for under-realisation or non-realisation of full export value, to allow reduction in the realisation of export value, provided the Bank is satisfied of the reasons cited:

Provided that where the export value is up to ₹10 lakh (or its equivalent in foreign currency) per shipping bill (for goods) or invoice (for services), the reduction of export value (including non-realisation of full export value) may be permitted based on a declaration from the exporter.

This Section deals with reduction of export value, and closure of Inward Remittance Messages (IRM) against advance receipts, only from a FEMA and EDPMS standpoint. Any bank finance outstanding against the shipping bill or invoice, whether as pre-shipment credit, post-shipment credit, bills discounted or purchased, or any other export finance, shall be closed in accordance with the Bank's guidelines, before an application under this Section is placed before the competent authority.

Two categories of matter are dealt with in this Section:

(a) Reduction in realisable value of an export bill above ₹10 lakh.

(b) Closure of an outstanding IRM in EDPMS against an advance receipt.

A.6.2 Reduction in Export Value — Above ₹10 lakh:

A.6.2.1 Scope:

This sub-section applies to a request for reduction in the realisable value of a shipping bill (for goods) or invoice (for services), where the original declared value of the bill exceeds ₹10 lakh (or its equivalent in foreign currency).

Request for reduction can be received any time before the due date / extended period. AD Bank shall need to be satisfied of the reasons for such reduction.

A.6.2.2 Zero-Value Shipments, No-Consideration Exports, and Re-import Cases:

This sub-section applies to categories of export transactions where, by the nature of the transaction, no realisation of foreign exchange against the export is contemplated, or realisation is contemplated in a form and at a time other than that of a conventional export. In such case, exporter should file EDF with NIL value for cases where no foreign exchange is involved.

A.6.2.2.1 Categories:

The categories of exports covered under this sub-section include, but are not limited to, the transaction specified below.

A. Exports without consideration: Exports where no export proceeds are expected to be realised, including but not limited to:

• Trade samples and publicity material
• Replacement goods exported free of charge
• Defective goods returned for replacement by overseas supplier
• Goods imported free of cost on re-export basis

B. Exports on re-import terms: Exports where the goods are expected to be reimported into India upon completion of the specified purpose, including but not limited to:

• Goods sent for repair, maintenance, testing or calibration, with re-import
• Defective goods sent for repair and re-import
• Aircraft or aircraft engines and spare parts sent for overhauling or repairs, with re-import

C. Exports for trade fairs, exhibitions and similar events: Exports made for promotion or participation in trade fairs, exhibitions or similar events, including but not limited to:

• Goods exported for trade fairs, exhibitions or similar promotional events

A.6.2.3 Export of Goods on Lease, Hire or Similar Arrangements:

This sub-section applies to exports of machinery, equipment, vessels, vehicles or similar goods, made under an agreement with an overseas lessee or hirer, against collection of lease rentals or hire charges over the period of the agreement, and with an obligation of re-import on termination of the agreement.

Transactions under this sub-section are distinct from conventional exports in that:

(a) no consideration is realised at the time of export against the declared value of the goods;

(b) consideration is realised in the form of periodic lease rentals or hire charges over the term of the agreement, in accordance with the payment schedule under the agreement; and

(c) the goods are re-imported into India on termination or expiry of the agreement.

A.6.2.4 Exhaustion of Measures by Exporter:

Before any application is placed before the competent authority, the Bank shall satisfy itself that the exporter has exhausted all reasonable measures to realise the full export value, including — to the extent applicable to the circumstance — correspondence with the overseas buyer, invocation of the payment terms under the contract, claim against insurance, invocation of ECGC cover, resort to legal remedies, and such other measures as the nature of the transaction permits.

Where the Bank is not satisfied that all reasonable measures have been exhausted, the application shall be returned to the exporter for further action.

A.6.3 Closure of Inward Remittance Message — Advance Receipt where Export Cannot be Made

A.6.3.1 Scope

This sub-section applies where an advance receipt credited is outstanding in EDPMS as an IRM, and the circumstances of the transaction make realisation against the advance, or refund of the advance, no longer achievable.

The following circumstances, among others of a similar nature, shall be considered under this sub-section:

(a) Advance for prototype development — prototype rejected and order cancelled. Where the advance was received for the development of a prototype, the prototype has been developed and submitted to the overseas buyer, the buyer has rejected the prototype on the ground that it does not meet the specified requirements, and the order has been cancelled in consequence; and the advance has been utilised by the exporter towards the cost of developing the prototype such that refund in full is no longer possible.

(b) Part-order fulfilled with advance utilised for manufacture; balance order not received or cancelled. Where the advance was received under an order contemplating multiple shipments, the exporter has commenced manufacture and has utilised the advance towards materials, labour and allied manufacturing costs in the course of part-fulfilment of the order, and the balance of the order has either been cancelled by the buyer or has not been progressed; with the consequence that the goods manufactured cannot be diverted for local sale at a value equivalent to the advance received, and the advance in its entirety is not available for refund.

(c) Overseas buyer untraceable over a reasonably long period. Where the overseas buyer has become untraceable over a reasonably long period despite reasonable efforts by the exporter, evidenced by correspondence returned undelivered, closure or abandonment of the buyer's registered place of business, and such other records of efforts as the exporter has maintained.

(d) Overseas buyer ceased operations or wound up. Where the overseas buyer has ceased operations, been declared bankrupt, been wound up, or is subject to equivalent proceedings, evidenced by an order or record of proceedings of a competent authority in the buyer's jurisdiction, and no authorised representative or liquidator is available to receive or account for the refund.

(e) Any other circumstance of similar nature. Any other circumstance that the Bank is satisfied genuinely renders the advance neither realisable against export nor refundable.

A.6.3.2 Exhaustion of Measures by Exporter:

Closure of the IRM shall be permitted only where the Bank is satisfied that the exporter has exhausted all reasonable measures relevant to the circumstance — including, as applicable, efforts to deliver against the advance, efforts to secure acceptance of the goods manufactured, efforts to establish contact with the buyer, efforts to effect refund, and inquiries through the buyer's bank where known.

A.7 — HANDLING OF SHIPPING BILLS UP TO ₹10 LAKH:

A.7.1 Regulatory Position

The first proviso to Regulation 4(2) of the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (FEMA 23(R)/2026-RB) provides that, in the case of an export where the shipping bill (for goods) or invoice (for services) is up to ₹10 lakh (or its equivalent in foreign currency), the entry in EDPMS may be closed based on a declaration from the exporter to the effect that the payment against the shipping bill/invoice has been realised, either in full or otherwise. Alternatively, such declaration may be submitted by the exporter to the Bank on a quarterly basis for bulk closure of entries in EDPMS.

The proviso to Regulation 6 provides that, where the export value is up to ₹10 lakh (or its equivalent in foreign currency) per shipping bill (for goods) or invoice (for services), the reduction of export value (including non-realisation of full export value) may be permitted based on a declaration from the exporter.

Applicability: for the purposes of this Section, the threshold of ₹10 lakh is applied on the entire original declared value of the shipping bill (for goods) or invoice (for services), and not on the current outstanding value.

A.7.2 Scope of the Simplified Procedure

Notwithstanding anything contained in Sections A.3 (Realisation), A.5 (Extension) or A.6 (Reduction), outstanding and fresh entries in EDPMS of original declared value equivalent to ₹10 lakh per entry or less shall be handled in accordance with this Section.

The simplified procedure covers:

(a) Closure of outstanding shipping bills — reconciliation and closure of EDPMS entries where the exporter declares that the amount has been realised, either in full or otherwise;

(b) Reduction in export value — reduction in the declared or realisable value of the shipping bill or invoice, based on the exporter's declaration; and

(c) Bulk closure — receipt of declarations from the exporter on a quarterly basis, combining several bills in one consolidated declaration, for bulk closure of entries in EDPMS.

A.7.3 Cases Under Investigation

Where the exporter or the transaction is under investigation by any law enforcement agency, No Objection from the concerned agency shall be on record prior to reconciling or closing entries in EDPMS.

A.8 — THIRD-PARTY RECEIPTS

A.8.1 Regulatory Position

Regulation 8 of the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (FEMA 23(R)/2026-RB) provides that an Authorised Dealer may permit third party (other than the parties undertaking export and import) receipts and payments for export and import transactions provided that the Authorised Dealer is satisfied with the bonafides of the transactions.

A.8.2 Commercial Context

Third-party receipts are a routine feature of international trade. Payments from a party other than the overseas buyer named in the contract or invoice arise in a variety of genuine commercial circumstances, including — by way of illustration and not limitation:

(a) Centralised payment function of the buyer group — the overseas buyer's payments are processed by a centralised treasury, buying house, or shared-services centre of the buyer's group, which makes the payment on behalf of the buyer;

(b) Group company settlement — the overseas buyer is a subsidiary or affiliate of a larger group, and the payment is made by the parent or head office of the buyer's group;

(c) Externalisation difficulties in the buyer's country — on account of exchange control or externalisation difficulties in the buyer's country, the payment is routed through another party in a different jurisdiction that owes amounts to the buyer;

(d) Agent-mediated sales — the export is consigned to an overseas agent who sells on behalf of the exporter, and the payment is received directly from the ultimate overseas buyer rather than through the agent;

(e) Sectoral business models — in certain sectors, including perishables such as flowers, sea foods, and similar commodities, the trade typically flows through overseas agents or auction platforms, and the ultimate buyer is not known to the exporter at the time of shipment; and

(f) Other circumstances — any other commercial circumstance in which the payment flows from a party other than the named buyer.

The Bank's role in respect of a third-party receipt is to satisfy itself that the receipt is against a bona fide trade transaction and that the involvement of a third party is not being used to conceal a sanctions, money-laundering, or terrorist-financing risk.

A.9 — SET OFF EXPORT RECEIVABLES AGAINST IMPORT PAYABLES

A.9.1 Regulatory Position

Regulation 7 of the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (FEMA 23(R)/2026-RB) provides that an Authorised Dealer may allow set-off of export receivables against import payables from/to the same overseas buyer or supplier or with their overseas group or associate companies, within the stipulated period for realisation of export proceeds or extended period, if any, allowed by the Authorised Dealer.

The 2026 framework does not distinguish between set-off of goods-against-goods, services-against-services, or goods-against-services. All combinations are permitted, subject to the Bank's satisfaction as to the bonafides of the underlying trade transactions and the conditions set out in this Section.

ACU mechanism shall be kept out of scope of Set-off.

A.9.2 Scope of Set-off

A.9.2.1 Party Arrangement

Set-off under this Section shall be permitted under either of the following party arrangements:

(a) Bilateral set-off — same overseas party. Set-off of export receivables against import payables where the overseas buyer under the export transaction and the overseas supplier under the import transaction are the same party.

(b) Group set-off — overseas group or associate companies. Set-off of export receivables against import payables where the overseas buyer under the export transaction and the overseas supplier under the import transaction are members of the same overseas group, or are associate companies, as supported by documentary evidence of the group or associate relationship. The arrangement may be effected directly between the parties, or through an in-house or outsourced centralised settlement arrangement operated by the group.

A.9.2.2 Permissible Combinations

Within each party arrangement under A.9.2.1, the following combinations are permitted:

(a) Goods against goods — export of goods set off against import of goods.

(b) Services against services — export of services set off against import of services.

(c) Goods against services, or services against goods — export of goods set off against import of services, or export of services set off against import of goods.

A.9.2.3 Set-off Patterns

Within the combinations under A.9.2.2, the following patterns of set-off are permitted:

(a) Full set-off — where the value of the export receivable and the value of the import payable coincide, and the entire obligation on each leg is discharged by the set-off.

(b) Partial set-off with partial realisation — where the set-off extinguishes a part of the export receivable, and the balance is realised in foreign exchange in the ordinary course under A.3. In this pattern, the set-off portion and the realisation portion together account for the full export value.

(c) Partial set-off with partial reduction — where the set-off extinguishes a part of the export receivable, and the balance is dealt with as a reduction in export value under A.6. The reduction portion is handled under the framework applicable to A.6, including the exhaustion of measures, the classification of reasons.

(d) Mixed pattern — where a combination of (b) and (c) applies, with a portion set off, a portion realised, and a portion reduced under A.6.

A.9.3 Timing

Set-off shall be effected within:

(i) the period for realisation of the export proceeds under A.3.1.1, read with any extension of the realisation period granted under A.5; and

(ii) the period for payment of the import obligation under the corresponding framework in Part B of this Policy.

Where the export or import leg is outside its respective time period at the point the set-off is proposed, the set-off shall not be effected unless the outstanding leg is brought within the permitted period by way of extension under A.5 (for the export leg) or the corresponding framework in Part B (for the import leg).

A.10 — EXPORT OF GOODS AND SERVICES AGAINST REPAYMENT OF STATE CREDITS

Regulation 14 of the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (FEMA 23(R)/2026-RB) provides that, for the implementation of the provisions of the Inter banking arrangement, an Authorised Dealer shall adhere to instructions and directions issued by the Reserve Bank from time to time on export of goods and services against repayment of State credits granted by the erstwhile Soviet Union.

A.11 — PROJECT EXPORTS

Regulation 15(1) of the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (FEMA 23(R)/2026-RB) provides that an Authorised Dealer may permit receipts/payments for project exports as per the underlying contract, after satisfying itself of the genuineness of the project.

Regulation 15(2) provides that, subject to monitoring by an Authorised Dealer, a project exporter may deploy temporary cash surplus, generated outside India, from such exports, for investment in short-term instruments (with original or residual maturity of one year or less) including in treasury bills and in deposits with banks, outside India.

A.12 — EXPORT FACTORING

Export factoring — including factoring of export receivables on a non-recourse basis and on a recourse basis — is governed by the Factoring Regulation Act, 2011 and the rules and regulations issued thereunder, and instructions and directions issued by the Reserve Bank from time to time.

A.13 — INTERNATIONAL TRADE INVOICING AND SETTLEMENT IN INDIAN RUPEES (INR)

Regulation 17 of the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (FEMA 23(R)/2026-RB) provides that the Authorised Dealer may be guided by the extant guidelines on the broad framework as well as instructions issued by the Reserve Bank in this regard, from time to time.

A.14 — UNREALISED EXPORTS

A.14.1 Regulatory Position

Regulation 13 of the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (FEMA 23(R)/2026-RB) addresses that if the export proceeds of an exporter remain unrealised for a period beyond one year from the due date of realisation or extended period, if any, allowed by an Authorised Dealer, the exporter shall undertake further exports only against receipt of full advance or an irrevocable Letter of Credit.

The above condition shall apply only to future export transactions between the specific exporter and the specific overseas buyer responsible for the unrealised export proceeds, i.e., the overseas buyer who has defaulted in making payment.

Accordingly, the restriction prescribed under Regulation 13 shall not apply to export transactions undertaken by the exporter with other overseas buyers who are not responsible for the unrealised export proceeds.

The EDPMS Section, Integrated Treasury Vertical, shall identify every exporter customer of the Bank in respect of whom one or more export entries in EDPMS remain unrealised beyond one year from the later of (a) the due date of realisation under A.3.1.1, or (b) the end of any extended period allowed under A.5.

A.15 — REPORTING UNDER EDPMS AND OTHER REPORTING SYSTEMS

A.15.1 Regulatory Position

Regulation 18(1) of the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (FEMA 23(R)/2026-RB) address that:

An Authorised Dealer:

(a) shall enter details of EDF (of its customers) as received from non-EDI (Electronic Data Interchange) port in EDPMS within five working days of receipt of EDF.

(b) shall enter details of EDF of service (of its customers) in EDPMS within five working days of receipt of EDF from an exporter.

(e) shall enter details of inward and outward remittances for all exports, imports and Merchanting Trade Transactions (MTT) in EDPMS and/ or IDPMS.

(f) shall monitor all transactions in EDPMS and IDPMS for closure of outstanding entries and follow-up with an exporter, an importer and person undertaking MTT for submission of documents for the same.

Mark-off/closure of entries:

(g) shall in the case of an export, mark-off the entry in EDPMS after ensuring that the export value has been realised.

(i) may on request by an exporter citing reasons, close the entry relating to export advance transactions in EDPMS, where no export has been made and where refund of such advance is not possible, after having been satisfied of the genuineness of the reasons cited.

(l) shall in the case of an MTT, close or update the respective entry in EDPMS and IDPMS after making the receipt and payment for both legs of the MTT.

Regulation 18(2) requires an Authorised Dealer shall report all foreign trade transactions in Foreign Exchange Transaction Electronic Reporting System (FETERS) in terms of extant guidelines issued by the Reserve Bank from time to time.

The EDPMS–IDPMS Section, Integrated Treasury Vertical, is the designated Bank-level responsible unit for EDPMS reporting under this Section.

In addition, A.P. (DIR Series) Circular No. 20 dated 16.01.2026 requires the Authorised Dealer to report to the Directorate of Enforcement any transaction that the Bank identifies as doubtful.

A.15.2 Other Reporting Systems

Where any export transaction handled under this Policy requires reporting in any system other than EDPMS, the Directorate of Enforcement channel, or the STR channel — including specialised returns and reports issued by the Reserve Bank from time to time — the reporting shall be undertaken in accordance with the guidelines issued by the Bank's Head Office from time to time. The EDPMS–IDPMS Section shall monitor the issuance of any such specialised reporting requirement and ensure timely compliance.

The EDPMS–IDPMS Section, Integrated Treasury Vertical, is the designated Bank-level responsible unit for EDPMS reporting under this Section.