The Directorate General of Foreign Trade (DGFT) has issued Notification No. 30/2026-27 dated 20 August 2026, which aligns the Foreign Trade Policy with the existing INR settlement framework under FEMA/RBI regulations. According to reports from Business Standard, this notification essentially brings the FTP in line with the wider INR settlement permissions already permitted under FEMA and RBI regulations. The notification changes the FTP consequences of INR settlement transactions, treating qualifying export proceeds realised in INR through prescribed banking channels at par with export proceeds realised in foreign currency for export benefits, incentives and fulfilment of export obligations. As per Economy & Policy News, the substantive change is that FEMA-compliant INR realisation, which was previously subject to restrictions or exceptions under FTP, is now accorded parity with foreign-currency realisation for FTP purposes. This alignment does not materially expand the underlying FEMA permission to receive INR, but rather ensures that FEMA-compliant INR realisation receives equivalent recognition under the FTP.
Prior to the notification, Para 2.52 of FTP 2023 permitted export contracts and invoices to be denominated in INR but generally required export proceeds to be realised in freely convertible currency, subject to specified exceptions. As reported by Business Standard, the FEMA (Manner of Receipt and Payment) Regulations, 2023 permitted trade transactions with countries other than ACU member countries to be settled in INR or foreign currency, subject to applicable FEMA/RBI disciplines. RBI has also provided specific mechanisms for INR settlement, including Vostro and Special Rupee Vostro arrangements and permitted transactions through accounts maintained by non-residents. However, as noted by Economy & Policy News, the FEMA/RBI framework permitted certain INR settlement arrangements which did not necessarily receive equivalent recognition under the FTP, creating a gap in the regulatory framework.
Regarding re-export deadlines, the exemption notification 158/95-Cus dated 14th November 1995 allows six months period and six more months extension from the date of importation within which the imported goods must be re-exported after due repairs or reconditioning. According to Business Standard, for the purposes of this notification, the date of importation is the date of actual Customs clearance of the imported goods. The CBEC circular no.14/97-Cus dated 3rd June 1997 clarifies that the time period of six months for re-export is calculated from the date of actual clearance of goods and not from the date of filing of Bill of Entry. As explained by Economy & Policy News, this clarification addresses practical concerns where the process of establishing goods identity can take time, and reckoning the six-month period from the date of filing the Bill of Entry would defeat the purpose of this beneficial notification.
