FEMA (Foreign Currency Accounts) Fifth Amendment Regulations, 2025 [Read Notification]

The Reserve Bank of India ( RBI ), through Notification No. FEMA 10(R)(5)/2025-RB, dated January 14, 2025, announced important amendments to the Foreign Exchange Management ( Foreign Currency Accounts by a person resident in India ) Regulations, 2015. These changes were introduced under the Foreign Exchange Management Act ( FEMA ), 1999, which aims to simplify exporters’ financial processes and facilitate smoother international trade operations.

Under the revised rules, Indian exporters can now open, hold, and maintain Foreign Currency Accounts with banks outside India. The accounts can receive the full value of export payments and advance remittances related to the export of goods or services. Exporters can utilize these funds to pay for imports into India or repatriate the remaining amount to India within a stipulated timeline.

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This amendment officially titled “The Foreign Exchange Management ( Foreign Currency Accounts by a Person Resident in India ) (Fifth Amendment) Regulations, 2025” is effective immediately upon publication in the Official Gazette.

A new provision is added for exporters ( residents of India ) under Regulation 5 of the original 2015 rules. The details of the new sub-regulation ( CA ) are as follows:

• Exporters ( Indian residents ) are now allowed to open and maintain a Foreign Currency Account with a bank outside India.
• The purpose of the account is to receive the full payment for their exports and to deposit advance payments received for goods or services exported.
• The funds can be used to pay for imports into India. Any remaining funds must be sent back ( repatriated ) to India by the end of the following month after receiving them, adjusted for any forward commitments ( e.g., agreements to pay in the future ).

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Comments on the amendments by Mr. Hemen Asher, Partner, Bhuta Shah and Co LLP.

“The RBI has made some amendments to the extant FEMA regulations to allow non-resident Indians, foreign nationals/ entities having business interest in India to move away from their dependence on any foreign currency (specifically the USD).  Also, certain relaxations have been provided for exporters. The key aspects of the amendments include –

• A person resident outside India (whether Indian or otherwise), having business interest in India may open a Special Non-resident rupee account (SNRR account) with a bank in India or its branch outside India for the purpose of undertaking current and capital account transactions permissible under the current FEMA regulations. – Impact – A non-resident person does not need to remit funds (which used to be typically done in USD, GBP or Euro) to his NRO / NRE account / or his family members.  He can maintain a SNRR account in INR and make remittances.  Similarly, for any person with business interest, he / the company can maintain an SNRR account for trade settlement with Indians.
• Exporters can open and maintain a Foreign Currency Account with banks outside India to receive export proceeds for utilizing the same to pay its import bills within a period not exceeding the end of the next month from the date of receipt of funds.  This move will help exporters in their treasury operations and mitigate losses on account of conversion / reconversion of foreign exchange.

The above amendments have been timely introduced to ensure stability of the INR vis a vis the USD.”

Compliance with other rules:

Exporters must still meet the requirements of Regulation 9 of the Foreign Exchange Management (Export of Goods and Services) Regulations, 2015, which deals with realizing and repatriating export proceeds within the specified timeline.

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