The Reserve Bank of India (RBI) has introduced important changes to foreign exchange compliance requirements for exporters and importers of services by notifying the Foreign Exchange Management (Export and Import of Goods and Services) (Second Amendment) Regulations, 2026 on November 2, 2026.
The amendment simplifies the Export Declaration Form (EDF) submission process for resident individuals exporting services and introduces a ₹10 lakh threshold for certain service export and import transactions. The changes are aimed at reducing procedural requirements, particularly for individual service providers and smaller-value cross-border transactions.
Issued by the RBI's Foreign Exchange Department through Notification No. FEMA 23(R)/(2)/2026-RB, the amendment modifies the principal regulations notified on January 13, 2026.
1. New Definition of 'Resident Individual' Introduced
The RBI has inserted a new clause (da) in Regulation 2(1) to define the term 'resident individual'.
Under the amended regulations, a resident individual means a person resident in India who is a natural person.
This definition provides clarity on the category of exporters and importers who will benefit from the simplified reporting requirements introduced through the amendment.
2. EDF Submission Simplified for Individual Service Exporters
One of the key changes relates to the submission of the Export Declaration Form (EDF) for service exports.
Under the amended Regulation 3(2), a resident individual exporting services will be deemed to have submitted the EDF when they provide the necessary information to their Authorised Dealer (AD) in relation to the receipt of payment for those services, for crediting the amount to their account.
This means that resident individuals will not have to follow a separate EDF submission process, provided the required payment-related information is furnished to the Authorised Dealer.
The amendment is particularly relevant for freelancers, independent professionals, consultants and other individuals receiving payments from overseas clients for services provided from India.
3. ₹10 Lakh Threshold for Other Service Exporters
The RBI has also extended simplified EDF treatment to exporters who are not resident individuals, subject to a monetary threshold.
Under the revised provision, exporters other than resident individuals will be deemed to have submitted the EDF when they provide the required information regarding receipt of payment to their Authorised Dealer, provided the value of the inward remittance for the service does not exceed ₹10 lakh or its equivalent in foreign currency.
Accordingly, the amended framework provides the following distinction:
| Category of service exporter | EDF submission treatment |
|---|---|
| Resident individual | Deemed submitted upon furnishing the prescribed payment-related information to the Authorised Dealer |
| Exporter other than a resident individual | Deemed submitted upon furnishing the required information where inward remittance does not exceed ₹10 lakh |
The change is expected to reduce procedural compliance for smaller service export transactions while retaining the prescribed reporting requirements.
4. Import of Services: IDPMS Reporting Requirement Revised
The amendment also brings changes to the reporting of service imports under the Import Data Processing and Monitoring System (IDPMS).
Under the earlier provision in Regulation 18(1)(d), the Authorised Dealer was required to enter details of service imports in IDPMS, as declared and submitted by the importer, within five working days of receiving the documents.
The RBI has now revised this requirement.
Under the amended provision, the Authorised Dealer must enter service import details in IDPMS within five working days of receiving the relevant information where both the following conditions are satisfied:
- The importer is a person other than a resident individual.
- The invoice value or contract value exceeds ₹10 lakh or its equivalent in foreign currency.
This means that the specified IDPMS reporting requirement will apply to service import transactions meeting both conditions.
The revised provision introduces a clear monetary threshold and excludes resident individuals from this particular reporting requirement.
5. When Will the Amendments Come Into Effect?
The RBI notification specifies that the Foreign Exchange Management (Export and Import of Goods and Services) (Second Amendment) Regulations, 2026, will come into force from October 1, 2026.
Although the notification was issued on November 2, 2026, its stated effective date is October 1, 2026.
What Do These Changes Mean for Businesses and Professionals?
The latest FEMA amendment is an important step towards simplifying foreign exchange compliance for service-related transactions.
For individual service exporters, the deemed EDF submission mechanism removes the need for a separate declaration process when the required payment information is provided to the Authorised Dealer.
For other service exporters, the ₹10 lakh threshold offers simplified treatment for smaller inward remittances. Similarly, the revised IDPMS provision narrows the specified reporting requirement for service imports to transactions involving non-individual importers with invoice or contract values exceeding ₹10 lakh.
Businesses, professionals, freelancers and Authorised Dealers should review their existing foreign exchange reporting procedures to ensure that transactions are handled in accordance with the amended provisions.
The broader objective is clear: reduce unnecessary procedural requirements for smaller cross-border service transactions while maintaining appropriate foreign exchange reporting and monitoring.
Official Notification
The changes have been notified through:
- Notification No.: FEMA 23(R)/(2)/2026-RB
- Issuing Authority: Reserve Bank of India, Foreign Exchange Department
- Date of Notification: November 2, 2026
- Effective Date: October 1, 2026
- Regulations: Foreign Exchange Management (Export and Import of Goods and Services) (Second Amendment) Regulations, 2026
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