Most of the coverage of the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 has been about exporters, because the Export Declaration Form is new and the SOFTEX form is gone. But the same notification — FEMA 23(R)/2026-RB, in force from 1 October 2026 — rewrote the import side too, and for a trader bringing in stock from China, a restaurant importing equipment, or a D2C brand buying components, the changes are the kind you only notice when a bank says no.
The headline: import payment deadlines now follow your contract, not a fixed regulatory period, and a large set of approvals that used to go to the RBI now sit with your bank.
Payment timelines follow the contract
Under the old framework, remittance for an import was generally expected within six months of shipment, with anything beyond needing justification. Regulation 9 of the 2026 regulations replaces that with a simpler instruction: the Authorised Dealer monitors import entries and follows up so that payment is made within the period specified in the underlying contract, and may allow an extension on the importer's request where the reasons are satisfactory.
That is genuinely better for anyone who negotiates long credit — but it moves the burden onto your paperwork. If your contract says 180 days, your bank needs to see the contract saying 180 days. Put the credit period explicitly on the purchase order and in the supplier agreement, not in an email thread.
Interest on delayed import payments is capped at the all-in-cost ceiling for trade credit under the Borrowing and Lending Regulations, 2018 — so a supplier cannot charge you an unlimited late fee and have the bank remit it.
Advance remittance: genuineness, and a guarantee above a threshold
Regulation 10 keeps the structure traders know:
- Route the advance and the subsequent payments through the same AD bank, unless you tell both banks you are changing.
- The bank must satisfy itself of the genuineness of the requirement before remitting an advance.
- Banks may set their own thresholds above which an advance needs a standby letter of credit or a guarantee from the supplier's bank.
Gold and silver: no advance remittance is permitted at all, except where the Act, rules or RBI directions specifically allow it.
If the import does not materialise (Regulation 12), you must repatriate the advance. And there is a sting: if you fail to bring the advance back within the contractual period, or your IDPMS entries are not marked off, any future advance payment will require an unconditional, irrevocable standby LC or a guarantee from an international bank of repute. One unresolved advance can therefore make every later import more expensive — which is the real reason to chase a non-delivering supplier rather than write it off quietly.
Set-off and third-party payments are now express
Two things that used to need case-by-case blessing are written into the regulations:
- Set-off (Regulation 7): your bank may allow export receivables to be set off against import payables with the same overseas counterparty, or their overseas group or associate companies. If you both buy from and sell to the same group, you can net the flows instead of remitting twice and paying conversion both ways — the cost of which the currency converter makes obvious.
- Third-party receipts and payments (Regulation 8): permitted where the bank is satisfied with the bona fides. Useful for trade routed through a group treasury or a sourcing agent.
Merchanting trade gets a six-month window
Regulation 16 sets the period between the outward and the inward remittage in a merchanting trade transaction at six months, extendable by the bank for reasonable cause, with remittances going to the overseas seller or buyer and third-party payments allowed where the bank is satisfied. For an Indian intermediary buying in one country and selling to another without the goods touching India, that is a clear, bankable rule rather than a negotiation.
IDPMS and the five-working-day clock
Regulation 18 puts timelines on the bank: import details are to be entered in IDPMS within five working days of receiving the documents, and banks must monitor and close outstanding entries. Entries are marked off once payment is made; where no import happened and the advance cannot be repatriated, the bank may close the entry after satisfying itself about the reasons.
The small-value relief that exporters get applies here too: under A.P. (DIR Series) Circular No. 12 of 1 October 2025, AD Category-I banks may close IDPMS entries of ₹10 lakh or less on the importer's declaration that payment has been made, and may accept those declarations quarterly in a consolidated format. The same circular told banks to review their charges and barred penal charges for delays caused by the bank.
Approvals move from the RBI to your bank
Regulation 20 hands Authorised Dealers a set of powers that previously required RBI approval under the 2015 regulations and the old Master Directions. In practice this means fewer three-month waits for a reference to Mumbai, and more decisions made by a branch or a trade desk — which cuts both ways. The bank now owns the judgement, so the quality of your documentation and your relationship with the trade desk matter more than they did.
What an importer should do now
- Put the credit period in writing on every PO and contract. Your remittance deadline is now whatever that document says.
- Clean up old IDPMS entries, especially unrepatriated advances — they are the thing that will force an LC on your next import.
- Ask your bank for its advance-remittance threshold above which it wants an SBLC or guarantee; it is a bank policy number, not a regulatory one, and it varies.
- Check whether set-off applies to you. Businesses that both export to and import from the same group are the obvious candidates.
- Cost the landed price properly — FOB value at the right exchange rate, freight by chargeable weight (volumetric weight calculator), duty, and creditable IGST — before you commit to a price list. The seller pricing workflow carries it through to a listing price.
- If you also export, the EDF obligation started the same day: EDF filing is now compulsory for service exporters, with the deadlines in the EDF filing helper.
FAQ
Is there still a six-month limit for paying for imports?
No. From 1 October 2026 the expectation is payment within the period specified in your underlying contract, with extensions at the bank's discretion on stated reasons.
Can I pay an advance for an import?
Yes, subject to your bank being satisfied the requirement is genuine. Above the bank's own threshold you may need a standby letter of credit or a guarantee. No advance remittance is allowed for gold or silver.
What happens if the goods never arrive?
You must repatriate the advance. Failing to do so within the contractual period, or leaving IDPMS entries open, means future advances will require an unconditional standby LC or an international bank guarantee.
Can I set off what a foreign buyer owes me against what I owe a foreign supplier?
Yes, where it is the same counterparty or their overseas group or associate company, and your AD bank permits it under Regulation 7.
How quickly must my bank record an import in IDPMS?
Within five working days of receiving the documents. Entries of ₹10 lakh or less can be closed on your declaration that payment was made.
Do these rules replace the old import Master Direction?
The 2026 regulations supersede the earlier export and import framework, including the Master Directions AD banks relied on, and delegate to banks several approvals that previously went to the RBI.