RBI's Proposed Export-Import Regulation Revamp: A Game Changer for Traders

The RBI's new draft guidelines aim to simplify export-import transactions by superseding 123 old notifications. Exporters praise this move as a significant effort to streamline processes. The new regulations also address the 'caution listing' issue and propose an extension for payment timelines. E-commerce players seek further modifications for reduced costs.

The Reserve Bank of India's (RBI) latest proposal to streamline export and import transactions is being hailed by exporters as a monumental effort to simplify trading processes. The draft operational guidelines, released on July 2, supersede an extensive 123 notifications related to exports and imports.

Federation of Indian Export Organisations (FIEO) Director General Ajay Sahai lauded the initiative, stating that the move will significantly simplify and streamline the export-import processes. The central bank has issued 'Regulation of Foreign Trade under Foreign Exchange Management Act (FEMA), 1999, Draft Regulations and Directions,' asking for public comments by September 1.

One key aspect of the draft is the requirement for exporters to furnish declarations specifying the full export value of goods or services. Additionally, it addresses the 'caution listing' of exporters, proposing a more transparent communication process with banks before any punitive actions are taken.

Critically, the new guidelines propose extending the time period between import and export transactions from 120 days to 180 days, aligning with FIEO requests. This extension will be beneficial for those engaged in merchanting trade, a model primarily used by agriculture and commodity exporters.

Economic think tank Global Trade Research Initiative (GTRI) pointed out that for the draft to truly benefit e-commerce exporters, two key changes must be incorporated: waiving bank charges for low-value transactions and accepting lower forex realizations from discounted sales. These measures would alleviate financial burdens on small e-commerce exporters and foster a more favorable growth environment.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)