On 13 January 2026 the RBI notified the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 - Notification No. FEMA 23(R)/2026-RB - superseding the 2015 framework. Nine days before the rules took effect, an amendment dated 22 September 2026 tightened the timelines that most finance teams had already started planning around.
If your team relaxed its payment-follow-up cadence on the assumption of a longer realization window, that assumption no longer holds. Here is what actually changed from 1 October 2026, and what belongs on your desk this month.
1. The realization clock: nine months, not fifteen
The January draft pointed towards a fifteen-month realization period. The September amendment reversed it. From 1 October 2026:
| Transaction | Realization period | Clock starts from |
|---|---|---|
| Export of goods (normal) | 9 months | Date of shipment |
| Export of services, including software | 9 months | Date of invoice |
| Goods held at an overseas warehouse | 9 months | Date of sale from the warehouse |
| Exports invoiced and settled in INR | 12 months | Date of shipment |
The practical consequence is immediate: shipping bills filed between December 2025 and February 2026 are now aging against a nine-month line, not a fifteen-month one. Re-baseline your EDPMS aging report before your bank does it for you.
2. The Rs 10 lakh relief: self-declaration closures
Regulation 4 introduces the single biggest administrative easing in the new framework.
- Open EDPMS entries up to Rs 10 lakh (or foreign currency equivalent) per shipping bill can be closed on the exporter's self-declaration that proceeds have been realized.
- Open IDPMS entries up to Rs 10 lakh per bill of entry can be closed on the importer's declaration that the transaction is settled.
- AD banks generally accept these as a quarterly bulk submission rather than case by case.
A practitioner note: this removes friction, not evidence. The declaration replaces the bank's case-by-case scrutiny, but the underlying paper trail still has to exist. Bank inspection teams and statutory auditors can call for it later, and a declaration without support is a worse position than an open entry.
3. Software and services: from SOFTEX to a monthly EDF
Regulation 3 expressly brings computer software within "services". Instead of piecemeal filings, exporters of services and software now furnish one consolidated EDF covering all exports to one or more recipients, within 30 days from the end of the month in which the invoices were raised.
Two operational consequences for software and IT-enabled exporters:
- Invoice dating becomes a compliance control, not just a billing preference - the nine-month clock runs from it.
- Monthly close now has a hard external deadline attached to it, so revenue recognition and EDF preparation need to sit in the same workflow.
4. Bilateral set-offs and third-party payments, formally codified
Regulation 7 empowers AD banks to permit direct set-off of export receivables against import payables with the same overseas counterparty, or with its group and associate entities, provided the underlying contracts exist and the pricing is arm's length.
Regulation 9 recognizes cross-border payments routed through third-party intermediaries or central group treasuries, provided the AD bank is satisfied on bona fides, commercial justification, and invoice linkage.
For groups that buy from and sell to the same overseas entity, this replaces a long-standing grey area with a documented route. It also raises the bar on documentation: set-off is now a filing, and it will be reviewed as one.
5. Imports move to contractual timelines
Regulation 6 links import remittance monitoring to the underlying commercial contract rather than a generic rule. The AD bank monitors IDPMS entries against the payment schedule in the purchase contract or proforma invoice, and has discretion to grant an extension on formal justification from the importer.
This favours importers with clean contracts and penalizes those working on informal terms. If your purchase terms live in email threads rather than signed documents, that gap is now a compliance exposure.
6. Regulation 20: clearing pre-2026 backlogs at the bank
The transitional provision is the part most CFOs will care about. AD banks are now empowered to handle and regularize many specified pre-1 October 2026 legacy transactions directly, provided the documentary proof satisfies the bank's internal trade policy. For a large set of historical cases, that removes the RBI approach entirely.
One exception matters: companies placed on the RBI caution list on or before 30 September 2026 remain governed by their existing orders under the 2015 regulations until formally cleared.
If you have been carrying a legacy EDPMS or IDPMS backlog because the RBI route looked slow and exposed, this is the window to move it through your AD bank instead.
The four-point checklist for October 2026
- Re-baseline EDPMS aging to nine months - start with shipping bills filed December 2025 to February 2026, which are closest to the line.
- Compile the under-Rs 10 lakh register - identify every entry eligible for self-declaration and prepare one bulk submission for your AD bank, with supporting documents indexed.
- Formalize group set-off protocols - where you both buy from and sell to the same overseas entity, document the contracts and pricing basis before approaching the bank under Regulation 7.
- Move software billing onto the EDF workflow - align invoice milestones with the 30-day month-end window.
Need help with this? thefintrado works with exporters, importers, and multinational finance teams to reconcile legacy EDPMS and IDPMS backlogs, draft AD-bank regularisation filings under Regulation 20, and structure bilateral set-offs. Book a confidential 20-minute compliance review - no obligation, response within one business day.
Common questions
Quick answers
- What is the export realization period under the 2026 FEMA regulations?
- Nine months. For goods, it runs from the date of shipment; for services and software, from the date of invoice; for goods sold from an overseas warehouse, from the date of sale out of that warehouse. Exports invoiced and settled in Indian rupees get twelve months. The earlier draft that suggested fifteen months was reversed by the amendment dated 22 September 2026.
- Can I close small EDPMS entries without going back to the bank each time?
- Regulation 4 allows open EDPMS entries up to Rs 10 lakh per shipping bill to be closed on the exporter's own declaration that proceeds have been realized, with IDPMS entries up to Rs 10 lakh per bill of entry treated the same way. Most AD banks accept these in a quarterly bulk submission. You still need the underlying documents on file - auditors and bank inspection teams can ask for them.
- Do software exporters still file SOFTEX forms?
- Computer software is now explicitly covered as a service. Instead of piecemeal filings, exporters of services and software submit a single consolidated EDF covering all exports for the month, within 30 days of the month end in which invoices were raised. Invoice dates matter more than before, because the nine-month realization clock runs from them.
- What happens to our pre-October 2026 backlog?
- Regulation 20 gives AD banks direct powers to regularize many specified legacy transactions dated before 1 October 2026, so a number of cases no longer need to go to RBI. Companies already placed on the caution list on or before 30 September 2026 stay governed by their existing orders until formally cleared.
