Exporters in Gift City can retain forex proceeds for 3 months now

Mumbai: The Reserve Bank of India on Monday notified an amendment to Foreign Exchange Management Act (FEMA) regulations, allowing exporters with foreign currency accounts in Gujarat's Gift City to keep foreign exchange proceeds for a maximum of three months.

Last week, the central bank announced that it is extending the period for repatriation, from one month to three months, for foreign currency accounts maintained in the International Financial Services Centre in India. However, it kept the norm unchanged for bank accounts in other jurisdictions.

Foreign currency accounts permitted to be opened abroad can also be opened in IFSC.


Before these rules were notified, exporters could use the funds, received in foreign currency accounts with banks outside India, for import payments or must have them repatriated by the end of the following month from the date of receipt of the funds.

"This will provide some operational relief as exports have a long list of FEMA compliances. In addition, it will also give them more flexibility to decide on the time on the repatriation by timing it with trends in USD-INR trends," said Dilip Parmar, research analyst at HDFC Securities.