India’s New Export and Import Payment Rules: What Changes from 1 October 2026
The Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 have come into effect from the 1st of October 2026, and bring exports and imports together under a single framework for the first time.
The regulations and the changes that they propose in the international trade structure are critical for all importers and exporters of goods and Services. Typically, for a business owner, three questions matter most. When must the money come in? What paperwork do they need to prepare? and What happens if things go wrong?
Like We mentioned earlier, there is now a standard set of regulations for both exports of goods as well as exports of services. The earlier set of regulations that governed software exporters, that mandated SOFTEX form submissions have been done away with. Under the new set of regulations, all exports must be reported on an Export Declaration Form (EDF) that shows its full value the full value of exports. For goods, the EDF form is to be filed at the time of export of such goods. At electronic (EDI) ports, the shipping bill itself shall count as the EDF.
For Services exporters the EDF is to be filed within 30 days from the end of the month in which the invoices for exports have been raised. An invoice dated 10 November is therefore to be declared in the EDF form to be filed by the 30th of December. Service providers can aggregate details of exports to several clients in one EDF for all of a month's exports. The provisions also allow for Exporters of services other than software to file this form on or before the day payment arrives. If they are able to arrive at this timing, perhaps.
The rules have allowed for relief to smaller exporters, Where a shipping bill or invoice is up to INR 1 Million , a simple declaration shall suffice and no monthly EDF needs to be filed, instead the regulations allow for filing of these declarations once per quarter for all such invoices, as long as each of them are less than the INR 1million figure.
The new regulations also have strict regulations in terms of by when the money needs to be received in India against such exports of goods and/or services.
| What you exported | Money must be received within |
|---|---|
| Goods | 9 months from the date of shipment |
| Services | 9 months from the date of invoice |
| Goods sent to a warehouse abroad | 9 months from the date the goods are sold from that warehouse |
| Goods or services invoiced or settled in Indian rupees | 12 months, from the same starting points |
| Project exports | As per the payment terms of the contract |
If the full value of the exports cannot be realized within the specified timelines for any reasons, a response and a reason has to be submitted to the AD bank which can approve the settlement of the outstanding balances against the EDFs submitted by you. This is not a requirement for invoices below INR 1Million where a simple declaration shall suffice.
So far, we have only seen additional compliances for exporters of services, barring software exporters, who did not have to hitherto deal with any such compliances. However, there is a key relaxation that has been allowed by the RBI under the new regulations. In the first, a set off money of balances owed to Indian entity is now allowed against money owed by the Indian party to the same overseas party, or its overseas group or associate companies. This is allowed as long it happens within the collection period. Your bank may also allow payment from a third party, such as a buyer's parent company, provided it is satisfied the deal is genuine.
Additional covenants of the regulations both advance payments and final payments need to be routed through the same AD bank, switching banks is not impossible but one will need to keep both the banks in the loop, increased the compliance burden.
Importers too are subject to these rules, they must pay now their overseas supplier within the period agreed in the respective contracts. Banks are required to track these payments and will follow up; they can however provide additional time for payment provided the payments are delayed for genuine reasons.
One of the most critical elements of these regulations is the case for where payments for exports remain unpaid, if the delay stretches for more than one year past the due date, or extensions thereof, Severe restrictions shall come to apply for exporters. They will then be able to export only against full advance payment or an irrevocable letter of credit. This is to our mind is can be regressive particularly for growing or risk-taking exporters who can suffer some payments being delayed beyond the specified limit.
All in all, the regulations also have the effect of increasing the burden on banks, which carry the heavy load of having to now administer these new regulations and police payments in and out of India to a much greater depth than they were earlier accustomed to. Going forward Every bank must adopt a written internal policy and standard operating procedure for trade transactions. It must list the documents, timelines and charges for each process. It must also cover extensions, adjustments to export value, advances, internal approvals and factoring. Banks must publish the policy and the main features of the procedure on their websites. They must also offer a grievance escalation process and an appeal to a higher level within the bank.
CNK Comment
If India has to make its exports and its service economy stronger then more compliances and regulations are the exact opposite of what is required to achieve that goal. That said, the regulations do bring simplification for importers and exporters of goods, global entities with sale and purchase from group entities will particularly welcome the set-off window that has now been enabled by the RBI.
moving administration to the banks is going to muddle matters since each bank or even different branches of the same bank may take a different line depending upon their comfort and understanding of the regulations and or documents.
Feel free to reach out to us for a detailed assessment on how this impacts your business.