India’s Directorate General of Foreign Trade clarifies policy to treat rupee receipts as equivalent to foreign currency realisation, closing a long-standing mismatch without enabling full liberalisation of cross-border deals.
India’s Directorate General of Foreign Trade has moved to remove a long-standing mismatch between trade policy and foreign exchange rules, after issuing Notification No. 30/2026-27. The change brings the Foreign Trade Policy into line with the wider rupee-settlement framework already allowed under the Foreign Exchange Management rules and Reserve Bank of India directions, so that export proceeds received in rupees through the prescribed banking channels are treated on a par with foreign-currency realisation for export benefits, incentives and the discharge of export obligations. According to Business Standard, the policy shift does not create a new right to settle every cross-border deal in rupees; rather, it gives formal trade-policy recognition to arrangements that were already permitted under the exchange-control framework.
Before the notification, export contracts and invoices could be denominated in rupees, but exporters were generally still expected to realise proceeds in freely convertible currency, subject to limited exceptions. Tax advisers quoted by Business Standard and Taxtmi say the practical effect of the new notification is to close that gap: if a transaction is compliant with the RBI’s rules, the resulting rupee receipt should now count for Foreign Trade Policy purposes as well. Even so, the underlying compliance burden remains in place, including observance of authorised dealer channels, special vostro structures where relevant, and the additional rules that apply to ACU-member countries.
That means the measure is best understood as a harmonisation exercise, not as a broad liberalisation of rupee settlement. Taxtmi notes that eligible rupee realisations will not automatically unlock every incentive or refund: exporters still have to satisfy scheme-specific conditions under mechanisms such as Advance Authorisation, EPCG and RoDTEP, as well as any other relevant filing and documentation requirements. In other words, the notification removes a policy inconsistency, but it does not override the detailed conditions attached to individual export benefits.
The same Business Standard report also revisits a separate Customs question that often trips up importers: under exemption notification 158/95-Cus, which allows imported goods repaired or reconditioned in India to be re-exported within six months, extendable by another six months, the clock starts from actual Customs clearance, not from the date the bill of entry is filed. A 1997 CBEC circular said counting from filing would defeat the purpose of the concession where time is needed to establish the identity of the goods. Customs manuals and related commentary continue to reflect that interpretation.
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