RBI Amends FEMA Regulations to allow Exporters to Hold Foreign Currency Accounts in IFSCs [Read Notification]
The Seventh Amendment to the FEMA Regulations provides benefits for exporters.
RBI - FEMA Regulations - Taxscan
RBI - FEMA Regulations - Taxscan
The Reserve Bank of India has amended the Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2015, through the Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) (Seventh Amendment) Regulations, 2025.
The amendments through Notification No. FEMA 10(R)(7)/2025-RB dated October 6, 2025 expressly permits exporters residing in India to open, hold and maintain foreign currency accounts with banks outside India, including in International Financial Services Centres (IFSCs), albeit, with specified repatriation timelines and compliance requirements.
The amendment inserts a definition of “International Financial Services Centre” into Regulation 2, which is in line with the meaning given in the International Financial Services Centres Authority Act, 2019.
Notably, the amendment also substitutes sub-regulation (CA) of Regulation 5 to clarify that an Indian-resident exporter may open, hold and maintain a foreign currency account abroad for the realisation of full export value and advance remittances.
The funds held in such accounts may be used to pay for imports into India or repatriated into India within prescribed time limits, subject to adjustment for forward commitments and compliance with realisation and repatriation requirements under the Foreign Exchange Management (Export of Goods and Services) Regulations, 2015.
The amendment also clarifies that foreign currency accounts permitted to be opened “outside India/abroad” may also be opened in an IFSC.
The amendment also stipulates that amounts held in accounts maintained with banks in an IFSC must be repatriated within three months of receipt, whereas funds held in accounts within other jurisdictions must be repatriated within the next month of receipt, on satisfaction of applicable realisation and repatriation norms under the export regulations.
The amendment is effective from the 6th of October, 2025 and is undersigned by N. Senthil Kumar, Chief General Manager.
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