In exercise of the powers conferred by clause a of sub section

## Report on Foreign Exchange Management (Export of Goods and Services) Amendment Regulations, 2021 **1. Executive Summary:** This report analyzes the Foreign Exchange Management (Export of Goods and Services) Amendment Regulations, 2021, as published in the Gazette of India. This amendment modifies the Principal Regulations of 2015, specifically concerning the re-export of leased aircraft, helicopters, and/or engines/auxiliary power units (APUs). The key change involves clarifying the conditions under which such re-exports are permissible, particularly when repossessed by overseas lessors following deregistration by the Directorate General of Civil Aviation (DGCA). This amendment aims to streamline the re-export process under specific circumstances related to lease terminations and the Cape Town Convention. **2. Introduction:** This report provides an overview and analysis of the Foreign Exchange Management (Export of Goods and Services) Amendment Regulations, 2021 (hereinafter "the Amendment"), based solely on the information provided in the official gazette notification. The report aims to inform affected parties about the specific changes introduced by this amendment and their potential implications. **3. Policy Overview:** * **Original Policy:** Foreign Exchange Management (Export of Goods Services) Regulations, 2015, Notification No. FEMA 23R/2015-RB dated January 12, 2016. * **Core Objective(s):** As inferred from the text, the overarching objective of the original policy and its subsequent amendments is to regulate and manage foreign exchange related to the export of goods and services from India. The specific objective addressed by *this* amendment is to clarify and regulate the foreign exchange implications of re-exporting certain types of leased assets. **4. Background and Rationale:** This amendment likely addresses ambiguities or operational challenges in the original regulations concerning the re-export of leased aircraft/helicopter assets. The *provided text* suggests the amendment is designed to facilitate the re-export of these assets when lessors repossess them following lease termination or cancellation, and after the DGCA deregisters them at the request of the IDERA holder, potentially in line with the Cape Town Convention. This suggests a need to clarify the process and ensure compliance with international agreements and industry practices. **5. Key Provisions / Changes:** This amendment modifies Regulation 4 of the Principal Regulations. The specific change is the substitution of sub-regulation (ea). * **Original Provision (As Implied):** The original sub-regulation (ea) is not provided in the text. However, given the amendment, it likely addressed the re-export of leased aircraft/helicopter assets in some form but lacked sufficient clarity or specific provisions for scenarios involving repossession and deregistration. * **New Provision:** The new sub-regulation (ea) explicitly permits the re-export of leased aircraft, helicopters, and/or engines/APUs, either completely or in partially knocked-down condition, when: * They are repossessed by an overseas lessor. * They are duly deregistered by the DGCA. * The deregistration is at the request of the Irrevocable Deregistration and Export Request Authorisation (IDERA) holder under the Cape Town Convention, or any other termination or cancellation of the lease agreement between the lessor and lessee. * Subject to permission by DGCAMinistry of Civil Aviation for such exports. * **Effect of the Change:** This amendment clarifies the permissibility of re-exporting such assets under these specific conditions, providing greater certainty and potentially streamlining the process for lessors seeking to repossess and re-export their assets after lease termination. The addition of the condition regarding permission by DGCAMinistry of Civil Aviation adds a layer of control to ensure adherence to aviation regulations. **6. Target Audience and Stakeholders:** Based on the *provided text*, the primary target audience and stakeholders directly affected by this amendment are: * Overseas lessors of aircraft and helicopters * Lessee airlines operating in India * The Directorate General of Civil Aviation (DGCA) * Holders of Irrevocable Deregistration and Export Request Authorisations (IDERAs) * The Ministry of Civil Aviation * The Reserve Bank of India **7. Implementation Aspects (Inferred):** * **Responsible Agency/Bodies:** The Reserve Bank of India (RBI) is the primary authority responsible for implementing and overseeing these regulations. The DGCA and the Ministry of Civil Aviation also play a role in granting permission for such exports. * **Timelines/Procedures:** The amendment comes into force from the date of its publication in the official Gazette (January 11, 2021, as indicated in the document). The specific procedures for obtaining permission from the DGCA/Ministry of Civil Aviation are not detailed in the *provided text* and would likely be outlined in separate guidelines or circulars. **8. Expected Outcomes / Impact of Changes:** The likely intended outcome of this amendment is to: * Facilitate the smooth re-export of leased aircraft and helicopter assets in cases of lease termination, repossession, and deregistration, particularly under the Cape Town Convention framework. * Reduce ambiguity and potential delays in the re-export process. * Provide greater clarity and legal certainty for overseas lessors and other stakeholders. * Ensure that re-exports are conducted in accordance with relevant aviation regulations and with the permission of the DGCA/Ministry of Civil Aviation. **9. Conclusion:** The Foreign Exchange Management (Export of Goods and Services) Amendment Regulations, 2021, represents a targeted update to the existing regulatory framework governing foreign exchange related to the export of goods and services. By clarifying the conditions for re-exporting leased aircraft/helicopter assets following repossession and deregistration, the amendment aims to streamline processes, reduce uncertainty, and facilitate compliance with international agreements. This amendment is significant for the aviation leasing industry and stakeholders involved in cross-border leasing transactions involving aircraft and helicopters.

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