The Government has amended Paras 2.52 and 2.53 of the Foreign Trade Policy (FTP) 2023 to align the provisions relating to denomination of export contracts and eligibility for FTP benefits in respect of export realisations in Indian Rupees with the applicable Foreign Exchange Management Regulations.
The amendments have been notified by the Directorate General of Foreign Trade (DGFT), Department of Commerce, Ministry of Commerce & Industry, through Notification No. 30/2026-27 dated 20 August 2026, and have come into force with immediate effect.
Export contracts and invoices may be denominated in foreign currency or Indian Rupees
Under the revised Para 2.52 – Denomination of Export Contracts, all export contracts and invoices, other than those involving member countries of the Asian Clearing Union (ACU), may be denominated either in foreign currency or Indian Rupees.
Correspondingly, export proceeds from such transactions may also be realised either in any foreign currency or in Indian Rupees.
The revised provision provides a clearer framework for exporters to undertake international trade transactions in INR, while retaining the option of foreign currency denomination and settlement, subject to the applicable regulatory framework.
Separate framework prescribed for Asian Clearing Union member countries
For export contracts involving member countries of the Asian Clearing Union, other than Nepal and Bhutan, the contracts are required to be denominated in a currency determined by the ACU.
However, such transactions may also be denominated and settled in accordance with directions issued by the Reserve Bank of India from time to time.
Special provisions retained for exports involving Nepal and Bhutan
Under the revised Para 2.52, export contracts involving Nepal and Bhutan are to be denominated and settled in Indian Rupees, or in accordance with directions issued by the Reserve Bank of India from time to time.
Further, export contracts and invoices undertaken under EXIM Bank/Government of India Lines of Credit may also be denominated in Indian Rupees.
FTP benefits extended to eligible export realisations in Indian Rupees
The Government has also substantially revised Para 2.53 – Applicability of FTP Schemes for Export Realisations in Indian Rupees.
Under the amended provision, exports to any country other than Nepal and Bhutan, for which export proceeds are realised in Indian Rupees through banking channels by way of credit to the INR accounts of persons resident outside India, opened in accordance with the applicable Foreign Exchange Management (Deposit) Regulations, will be eligible for export benefits and incentives under the Foreign Trade Policy.
Such exports will also be eligible for fulfilment of Export Obligations under the FTP at par with exports where proceeds are realised in foreign currency.
INR export realisations placed at par with foreign currency for FTP benefits
The revised provisions provide that eligible exports for which proceeds are realised in Indian Rupees through the prescribed banking mechanism will be treated at par with exports realised in foreign currency for the purpose of benefits, incentives and fulfilment of Export Obligations under the Foreign Trade Policy.
The amendment therefore provides a broader policy framework for recognising eligible INR-denominated and INR-settled export transactions under various FTP schemes, subject to compliance with the applicable foreign exchange regulations.
Existing safeguards for exports to Iran to continue
In the case of exports to Iran, the revised provisions relating to export realisation in Indian Rupees will continue to apply subject to compliance with Para 2.19 of the Foreign Trade Policy 2023.
FTP provisions aligned with FEMA regulations
The effect of Notification No. 30/2026-27 is to align Paras 2.52 and 2.53 of FTP 2023 concerning the denomination of export contracts and eligibility for FTP benefits on INR export realisations with the Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2023.
The amendment creates a harmonised policy framework between the Foreign Trade Policy and the foreign exchange regulations governing the manner in which international trade payments may be received and settled.
The Notification has been issued in exercise of powers conferred under Sections 3 and 5 of the Foreign Trade (Development & Regulation) Act, 1992, read with Paragraphs 1.02 and 2.01 of the Foreign Trade Policy 2023, and with the approval of the Minister of Commerce and Industry.
The Notification can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2026/08/Notfication-30-2026-27-eng.pdf
