FEMA: export realisation period extended to 15 months

By Notification F.No. FEMA 23(R)/(7)/2025-RB dated 13 November 2025, the Reserve Bank of India extended the time limit for realisation of full value of export proceeds from 9 months to 15 months from the date of export. The new 15-month window applies uniformly to all exporter categories — including SEZ units, Export Oriented Units (EOUs), Status Holders, and units under STPI, EHTP and BTP schemes — bringing the regulation in line with the working capital reality of many exporting businesses.

What changed

Under the earlier framework (FEMA 23(R), as amended), exporters were required to realise and repatriate the full value of goods or software export within 9 months from the date of export, with limited extension powers vested in AD banks and the RBI. The 9-month rule had been temporarily extended to 15 months during the pandemic and then partially rolled back.

The November 2025 amendment permanently extends the realisation timeline to 15 months across exporter categories. This is the same window for both goods and software exporters — previously, certain SEZ units enjoyed 15 months while others were on 9. The structure is now uniform.

The amendment also retains the three-year window within which an exporter must complete shipment against an advance payment received from a foreign buyer.

Why this matters — the working capital lens

For exporters whose buyers operate on 90-180 day payment terms, the 9-month limit was a tight squeeze. Once shipping time, customs clearance overseas, buyer-side processing and the negotiation of any commercial disputes were accounted for, exporters routinely needed AD-bank extensions. Each extension was a paperwork exercise and a soft constraint on the bank’s appetite to fund subsequent shipments.

The 15-month window largely eliminates the routine extension request for most fully-documented export cycles. It also reduces the regulatory friction for exporters dealing with longer-dated payment terms common in capital goods, project exports and certain services contracts.

What is unchanged

The obligation to realise. The 15-month window is a deadline, not a relaxation of the underlying duty to realise. Failure to realise within 15 months attracts the same FEMA contravention exposure as before.
Documentation requirements. The Bills of Entry / shipping bills, invoices, GR forms / electronic equivalents, and the linkage in the Export Data Processing and Monitoring System (EDPMS) all remain.
Write-off and self-write-off limits. The thresholds for self-write-off (currently 5% of total export proceeds for the calendar year, subject to limits) and AD-bank-approved write-off remain in their existing form.
Advance against exports. Three-year shipment window for advances received continues.

The structural shift — STPI bowing out

Alongside the timeline extension, the Draft FEMA (Export and Import of Goods and Services) Regulations, 2025 propose a structural shift: discontinuing the role of the Software Technology Parks of India (STPI) in export compliance filings for software exporters, with AD banks becoming the primary authority for export documentation in domestic tariff areas. For SEZ units, the Development Commissioner continues to handle export-import compliance.

For STPI-registered software exporters, this means: the SOFTEX form filing chain is being reworked, with the AD bank becoming the single window for both forex realisation tracking and the documentation that previously sat with STPI.

What to update in your FEMA file

Internal export realisation tracker. If you tracked “months since shipment” with a 9-month flag, change the flag to 15. Re-set follow-up reminders to fire at month 12 (instead of month 7) so there’s real time to chase.
Customer credit period reviews. Customers who pushed back on your earlier 90-180 day credit term offer may be willing to formalise longer terms now that the regulatory pressure on you has eased. Revisit those negotiations.
EDPMS reconciliation. The realisation timeline change has been reflected in EDPMS. Make sure your AD bank’s EDPMS portal is updated with the new flagging.
SOFTEX filings. If you were filing SOFTEX with STPI, prepare for the transition to AD-bank-led documentation. Monitor AD bank circulars and the RBI master direction for the transition mechanics.
Existing extension requests. If you have an extension application pending with RBI or your AD bank, the 15-month window may render it moot if your specific case now falls within the new timeline. Cross-check.

Penalty exposure is unchanged

Failure to realise export proceeds within the prescribed period (now 15 months) without RBI permission is a contravention under Section 8 of FEMA, attracting penalty up to three times the amount involved or ₹2 lakh, whichever is higher, plus ₹5,000 per day for continuing default. The 15-month window is generous — but missing it has the same teeth as before.

What we recommend

Update your internal SOPs and AD-bank communications to reference the 15-month limit (and cite the November 2025 RBI notification).
Run a one-time review of pending AR ageing in your export ledger. Cases that were close to the 9-month wall may now have an additional 6 months of breathing room — treat them as “current” for chasing purposes, not “in extension territory”.
Train your finance team on the EDPMS interface changes — the look-and-feel of overdue flags has changed.
For software exporters, watch the AD-bank/STPI transition — the new documentation flow may simplify some processes but introduce new ones.
Don’t treat the 15-month window as default credit terms — it’s a regulatory ceiling, not a commercial recommendation. Tighter customer-side terms are still better for cash flow.

If you’d like a FEMA compliance review for your export operations or help navigating the STPI/AD-bank transition, write to us at [email protected].

Sources

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