FEMA / RBI

The Foreign Contribution (Regulation) Amendment Act, 2020 (the “Act”), has been notified by the
Ministry by Home Affairs on the 29th of September, 2020 to amend certain provisions of the Foreign
Contribution (Regulation) Amendment Act, 2010 (“FCRA”)

COVID has dealt a death blow to the importers & exporters. To help them to deal with the challenges posed by pandemic as well as enhance India’s export competitiveness in the global market, the RBI through its Statement on Development and Regulatory Policy (part of Bi-monthly Monetary Policy Statement) has brought in certain changes to Export- Import transaction processing. This note is a gist to the changes made by RBI to facilitate external trade.

Investment from NRIs in Indian Companies is subject to specific compliances under FEMA (Foreign Exchange Management Act). Though the guidelines are clear, the
actual process somehow is not easy in our experience and does not conform to “Ease of doing business”.

The Micro Finance Sector was conceived with the main objective of ensuring financial inclusion of the sub prime sector of the Society. In other words, banks and financial
institutions did not and do not address the requirements of the economically backward

Foreign Inward Remittance Certificate (FIRC) is a document that provides proof of inward remittance to India. It is treated as documentary evidence by most of the statutory authorities for
confirming the validity of the foreign money received by the beneficiary.

In common parlance, international trade denotes import by a buyer in one Country from a seller in another country and re-sale in his own country or export to a buyer in a third country,
involving movement of goods as shown in the diagram below :

Real Time Gross Settlement System (RTGS) is a fund transfer mechanism where transfer of money takes place from one bank to another on a ‘real time’ and on ‘gross’ basis.

In the globalised scenario where the Indian business houses export/import products and/or execute projects abroad, it is inevitable for them to have their presence in foreign countries. The
Indian firms and companies may open branch offices abroad or even post a representative

Foreign Direct Investment received by a Company is required to be reported on the FIRMS Portal of RBI in terms of the Foreign Exchange Management (Non-debt Instruments) Rules,
2019 read with Foreign Exchange Management (Mode of Payment and Reporting of Non