Government and RBI discuss easing Fema rules to boost e-commerce exports

Santosh Kumar Sarangi, the Director General of Foreign Trade (DGFT), mentioned that the commerce ministry was engaged in discussions with the Reserve Bank of India (RBI) to ease e-commerce exports by liberalising the guidelines of the Foreign Exchange Management Act (FEMA). He stated that they had recently convened with the entire team of RBI officials responsible for this matter. He anticipated that the RBI guidelines would undergo significant liberalisation, with the expected outcomes becoming apparent within the next two to three months regarding e-commerce export policies. Sarangi further explained that currently, the RBI has a FEMA guideline for business-to-business (B2B) shipments, stipulating that payments must be received within a specified timeframe (nine months). However, he hinted that this timeframe might be extended in the realm of commerce. This indicated that the commerce department was collaborating with the RBI to relax the guideline concerning e-commerce exports. Additionally, according to FEMA guidelines, export realisation necessitates offsetting against the shipping bill, typically facilitated through the generation of an Electronic Bank Realization Certificate (e-BRC). Sarangi revealed that the DGFT's team was working with the RBI to enable this e-BRC to be issued on a self-declaration basis. This adjustment would benefit exporters dealing with numerous consignments of small values, allowing them to manage the process autonomously without bank involvement. This proposed change would significantly enhance the ease of conducting e-commerce business operations. Currently, banks upload e-BRCs onto the DGFT system upon the realization of payment for exports. Any company seeking benefits under the Foreign Trade policy must provide e-BRC as evidence of payment realization for exports conducted.