**Policy Summary: Foreign Exchange Management (Export of Goods and Services) Amendment Regulations, 2021**
This notification, No. FEMA 23R/5-2021/RB, issued by the Reserve Bank of India (RBI) on September 08, 2021, introduces amendments to the Foreign Exchange Management (Export of Goods and Services) Regulations, 2015, Notification No. FEMA 23R/2015-RB dated January 12, 2016.
The key amendment pertains to Regulation 15, sub-regulation 1, clause (ii), which addresses the rate of interest applicable to advance payments received for exports. The revised regulation stipulates that the interest rate, if any, payable on advance payments shall not exceed 100 basis points above the London InterBank Offered Rate (LIBOR) or other applicable benchmark as directed by the Reserve Bank of India.
This amendment is issued under the authority granted by sub-sections (1) and (2) of Section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999). The regulations take effect from the date of their publication in the Official Gazette, September 10, 2021.
The notification was issued by R.S. Amar, Chief General Manager, Reserve Bank of India.
The original Foreign Exchange Management (Export of Goods & Services) Regulations, 2015 were published in the Official Gazette vide G.S.R. No. 19(E) dated January 12, 2016, and have been subsequently amended by Notifications No. FEMA 23R/1-2017-RB dated June 23, 2017, No. FEMA 23R/2-2019-RB dated December 03, 2019, No. FEMA 23R/3-2020-RB dated March 31, 2020, and No. FEMA 23R/4-2021-RB dated January 08, 2021.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for regulating the foreign exchange market and issuing notifications related to the Foreign Exchange Management Act (FEMA).
Foreign Exchange Management Act, 1999: An act of the Parliament of India to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India.
Foreign Exchange Management Export of Goods and Services Regulations, 2015: Regulations issued by the Reserve Bank of India under the Foreign Exchange Management Act, 1999, governing the export of goods and services from India.
Foreign Exchange Management Export of Goods and Services Amendment Regulations, 2021: Amendments to the 2015 regulations concerning the export of goods and services, as per the notification.
Mumbai, Maharashtra: The location of the Central Office of the Reserve Bank of India, where the notification was issued.
London InterBank Offered Rate LIBOR: A benchmark interest rate that was used globally. The notification references it as a factor in determining interest rates on advance payments.
R. S. Amar: Chief General Manager at Reserve Bank of India, who is mentioned as responsible in the notification.
RESERVE BANK OF INDIA
FOREIGN EXCHANGE DEPARTMENT
CENTRAL OFFICE
MUMBAI 400 001
Notification No. FEMA 23(R)/(5)/2021-RB September 08, 2021
Foreign Exchange Management (Export of Goods and Services) (Amendment) Regulations, 2021
In exercise of the powers conferred by sub-section (1) and sub-section (2) of section 47 of the Foreign
Exchange Management Act, 1999 (42 of 1999), the Reserve Bank of India makes the following
amendments in the Foreign Exchange Management (Export of Goods and Services) Regulations, 2015
[Notification No. FEMA 23(R)/2015- RB dated January 12, 2016] (hereinafter referred to as 'the Principal
Regulations'), namely:
1. Short title and commencement: -
i. These Regulations may be called the Foreign Exchange Management (Export of Goods and
Services) (Amendment) Regulations, 2021.
ii. They shall come into force from the date of their publication in the Official Gazette.
2. In the Principal Regulations, in Regulation 15, in sub-regulation 1, for clause (ii), the following shall
be substituted, namely: -
“ii) the rate of interest, if any, payable on the advance payment shall not exceed 100 basis points above
the London Inter-Bank Offered Rate (LIBOR) or other applicable benchmark as may be directed by
the Reserve Bank, as the case may be; and”.
(R. S. Amar)
Chief General Manager
Published in the Official Gazette of Government of India – Extraordinary – Part-III,
Section 4 dated September 10, 2021
Foot Note: - The Foreign Exchange Management (Export of Goods & Services) Regulations, 2015
[Notification No. FEMA 23(R)/2015- RB dated January 12, 2016] were published in the Official Gazette
vide G.S.R.No.19 (E) dated January 12, 2016 in Part II, Section 3, Sub-Section (i) and subsequently
amended as under:(i) Notification No. FEMA 23(R)/(1)/2017-RB dated June 23, 2017 published in the Official
Gazette vide G.S.R. No. 635(E) dated June 23, 2017
(ii) Notification No. FEMA 23(R)/(2)/2019-RB dated December 03, 2019 published in the
Official Gazette on December 09, 2019
(iii) Notification No. FEMA 23(R)/(3)/ 2020-RB dated March 31, 2020 published in the Official
Gazette on March 31, 2020
(iv) Notification No. FEMA 23(R)/(4)/2021-RB dated January 08, 2021 published in the Official
Gazette on January 11, 2021