The RBI’s recent amendments bring much-needed relief to Indian exporters struggling with delayed international payments. The central bank has extended the mandatory export realisation period from nine months to fifteen months, addressing longstanding working capital challenges faced by businesses. This change comes alongside another significant relaxation: exporters now have three years instead of one year to complete shipments against advance payments.
This guide examines the Foreign Exchange Management (Export of Goods and Services) (Second Amendment) Regulations, 2025, explaining how the new rbi circular on export realisation impacts compliance requirements. You’ll learn about the Master Circular context, practical compliance strategies, and modern collection solutions that help maximise these regulatory benefits.
Key Takeaways
- The RBI has officially extended the mandatory period for realising and repatriating export proceeds from 9 months to 15 months under the 2025 FEMA amendment.
- Exporters now have a 3-year window (previously 1 year) to complete shipments against advance payments, provided the advance is declared in export documentation.
- The new 15-month timeline applies uniformly to all exporter categories, including SEZ units, Status Holders, and EOUs, ensuring a level playing field.
- Compliance remains critical, as failure to realise proceeds within the new deadline can result in severe FEMA penalties, making accurate EDPMS reporting essential.
What Is the New RBI Circular on Export Realisation?
The introduction outlined how recent amendments provide crucial breathing room for exporters. The notification’s foundation lies in specific regulatory changes that reshape export compliance frameworks across India.
The November 13, 2025 notification (FEMA 23(R)/(7)/2025-RB) represents a formal amendment to the Foreign Exchange Management (Export of Goods & Services) Regulations, 2015. This rbi circular on export realisation serves several critical purposes:
- Modifies Regulation 9 and Regulation 15 of the principal 2015 regulations
• Harmonises export realisation norms across different exporter categories
• Aims to improve ease of doing business by addressing practical payment challenges
• Takes immediate effect upon publication in the Official Gazette
Extension of Realisation Period (Regulation 9)
The amended Regulation 9 fundamentally changes export payment timelines. Previously, exporters faced a stringent nine-month deadline for realising and repatriating the full value of exports. The new provision extends this to fifteen months from the date of export.
This extension applies uniformly to goods, software, and services exports. The additional six months provides crucial flexibility for recovering payments from overseas buyers, particularly beneficial when dealing with payment disputes or contractual delays.
Extension for Advance Payments (Regulation 15)
Regulation 15 amendments address another critical exporter concern. Under previous rules, exporters receiving advance payments had to complete shipments within one year. The revised regulation extends this period to three years.
This extension comes with one key condition: the advance payment must be declared in relevant export documentation. The change particularly benefits exporters handling complex production cycles or long-term manufacturing contracts.
Who Does This Amendment Apply To?
The harmonised rules create a level playing field across exporter categories:
- SEZ units (Special Economic Zones)
• Status Holder Exporters under foreign trade policy
• EOUs (Export Oriented Units)
• Units in EHTPs (Electronic Hardware Technology Parks)
• Units in STPs (Software Technology Parks)
• Units in BTPs (Bio Technology Parks)
Did You Know?
The standard nine-month realisation period originated from the Master Direction on Export of Goods and Services, which consolidates decades of export regulations into one comprehensive framework.
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Comparison: Old vs. New Export Realisation Mandates
Understanding the specific changes requires examining how new provisions differ from previous mandates. The amendments address two fundamental aspects of export transactions.
| Parameter | Old Provision (2015 Regulations) | New Provision (2025 Amendment) |
| Realisation Period | 9 months from date of export | 15 months from date of export |
| Shipment against Advance Payment | 1 year from receipt of advance | 3 years from receipt of advance |
| Documentation Requirement | Standard export documents | Advance must be declared in export documentation |
| Compliance Pressure | High due to shorter timelines | Reduced with extended deadlines |
Why Did RBI Introduce These Relaxations?
The comparison above highlights significant operational benefits for exporters. These changes weren’t arbitrary; they respond to specific economic pressures and business realities.
- Global trade disruptions: Supply chain challenges and slower international demand create payment delays beyond exporters’ control
• Liquidity management: The extension prevents short-term payment delays from escalating into FEMA violations or credit defaults
• Long-term contracts: Many infrastructure and technology exports involve multi-year implementation cycles requiring flexible timelines
• Export competitiveness: Aligning Indian regulations with global standards supports the government’s Export Promotion Mission
Pro Tip: Document all buyer communications regarding payment delays. AD banks consider these when evaluating extension requests beyond the new 15-month window.
Understanding the Master Circular on Export of Goods and Services
While these relaxations offer immediate relief, exporters must understand their place within broader regulatory frameworks. The rbi master circular on realisation of export proceeds serves as the comprehensive guidebook for all export-related regulations.
How Can Exporters Maintain Compliance?
The Master Circular provides the regulatory foundation, but practical compliance requires systematic processes. Even with extended timelines, proper documentation and reporting remain non-negotiable.
Essential compliance measures include:
- Accurate EDPMS reporting: The Export Data Processing and Monitoring System tracks all export transactions. Update shipping bills and realisation status promptly
• Maintain advance payment proof: For the three-year shipment extension, keep certified copies of advance declarations in export documentation
• Regular e-BRC audits: Review outstanding export bills monthly to utilise the 15-month window effectively
• AD bank coordination: Ensure your bank updates status codes correctly in their systems to reflect realisations
How to Optimise Your International Collections?
Compliance forms the foundation, but efficient collection systems determine whether exporters truly benefit from extended timelines. Modern payment infrastructure can significantly reduce realisation periods.
Key optimisation strategies:
- Reduce FX fees and transaction costs to improve profit margins
• Implement virtual accounts for simplified payment reconciliation
• Digitise FIRC generation to eliminate manual bank visits
• Explore alternatives to traditional wire transfers for faster settlements
Challenges with Traditional Wire Transfers
Traditional banking methods create unnecessary friction in international collections:
- High SWIFT fees ranging from ₹750 to ₹2,000 per transaction
• Opaque exchange rates with hidden markups of 1-3.5%
• Manual FIRC collection requiring multiple bank visits
• Delayed reconciliation due to missing reference numbers
These inefficiencies compound realisation delays despite regulatory extensions.
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Building on traditional payment challenges, innovative solutions transform how exporters manage international receipts. The extended realisation timelines create opportunities for more strategic collection approaches.
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Conclusion
The RBI’s extension of export realisation timelines from nine to fifteen months, coupled with the three-year advance payment shipment window, provides substantial operational relief. These measures directly address cash flow pressures in challenging global markets.
Staying updated with the rbi circular on export realisation and broader Master Circular ensures continued compliance. Adopting efficient payment partners helps exporters maximise these regulatory benefits while reducing collection costs and compliance burden.
FAQs:
1. What is the new time limit for realising export proceeds in 2026?
Under the Foreign Exchange Management (Second Amendment) Regulations, 2026, the mandatory time limit for realising and repatriating full export value has been extended from 9 months to 15 months.
2. Does the 15-month realisation period apply to SEZ units?
Yes, the amendment harmonises the rules, making the 15-month realisation period applicable to all exporters, including SEZ units, Status Holders, EOUs, and technology park units.
3. How long do I have to ship goods after receiving an advance payment?
Exporters are now allowed up to three years from the date of receiving an advance payment to complete the shipment, provided the advance was declared in the export documentation.
4. Is the extension to 15 months automatic or do I need to apply?
The extension is automatic and effective immediately upon the notification’s publication in the Official Gazette; exporters do not need to file individual applications to utilise the 15-month window.
5. What are the penalties for not realising export proceeds within the stipulated time?
Failure to realise proceeds within the mandated period is a FEMA contravention, which can attract penalties up to three times the sum involved (300%) and potential scrutiny from the Enforcement Directorate.
6. Do I need to declare advance payments to avail the 3-year shipment window?
Yes, the 3-year extension for shipment against advance payments is conditional upon the advance being explicitly declared in the relevant export documentation.
7. How does this amendment affect the RBI Master Circular?
This specific notification amends the regulations immediately, and the broader Master Circular on Export of Goods and Services will be updated (typically in July) to reflect these consolidated changes.
