Foreign Exchange Management Act, 1999 (FEMA)

Act 1999

Effective: 1 Jun 2000

Plain-English summary

Foreign Exchange Management Act, 1999 (FEMA) exists as India's primary legal act that governs all cross-border financial dealings and foreign investments in the country. As opposed to the FERA times when the regulatory body was backed by criminal sanctions, FEMA acts as a civil regulatory net that divides the flow of funds into the free current account and regulated capital account category in conjunction with the RBI and the Enforcement Directorate (ED). The regulatory structure has been highly reformed by means of introducing various 2026 structural reforms, such as the uniform trade regulations of 2026, revised digital compliance metrics for the Foreign Portfolio Investors (FPIs), and revised compounding Master Directions.

Who it applies to

Banking · Corporates (Listed)

Topics

AML / CFT / Sanctions Trade Controls & Export Compliance

Official source

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