FEMA, Payments & Incoterms
Realisation of export proceeds, import payments, payment terms and Incoterms 2020.
Key facts
- New FEMA (Export and Import of Goods and Services) Regulations, 2026 (notified 13 January 2026) apply from 1 October 2026.
- Full export value must be realised within 15 months from the date of shipment (goods) or invoice (services), unless extended through the AD bank.
- Exports and imports are tracked by banks in EDPMS and IDPMS; unrealised shipping bills show as outstanding against your IEC.
- The bank issues an e-BRC (electronic Bank Realisation Certificate) on realisation; it is proof of export for GST and FTP benefits.
- Payment terms, from safest for the exporter: advance payment, letter of credit (LC), documents against payment (D/P), documents against acceptance (D/A), open account.
- Incoterms 2020 have 11 terms. Common ones: EXW (buyer does everything), FOB (seller clears export and loads on the vessel), CIF (seller pays freight and insurance to destination port), DAP and DDP (seller delivers to the buyer's place; DDP includes import duty).
Common questions
What is the time limit to realise export proceeds?
15 months from the date of shipment for goods, or from the invoice date for services, under the FEMA (Export and Import of Goods and Services) Regulations, 2026 in force from 1 October 2026. The AD bank can extend it in genuine cases.
What is e-BRC?
The electronic Bank Realisation Certificate generated by your bank when export proceeds are received. It links to the shipping bill and is used as proof of realisation for GST refunds and FTP benefits.
What is the difference between FOB and CIF?
Under FOB, the seller's responsibility ends when goods are loaded on the vessel at the export port; the buyer pays freight and insurance. Under CIF, the seller also pays freight and insurance to the destination port, though risk passes to the buyer once goods are on board.
Which payment method is safest for exporters?
Advance payment, then a confirmed letter of credit. D/P and D/A carry more risk, and open account is the riskiest; use export credit insurance (ECGC) for those.
Sources
- Foreign Exchange Management Act, 1999 (export realisation, import payments)