What Do Sections 7 and 8 of FEMA Require From Indian Exporters?

Section 7 of FEMA is the declaration duty and Section 8 is the realisation duty. Section 7 tells exporters to report the export and its value in the form RBI specifies. Section 8 tells every person resident in India to take all reasonable steps to bring foreign exchange owed to them into India within the period RBI specifies.

• Goods: Every exporter of goods must furnish a declaration with true and correct material particulars, including the full export value. If the full value is not known at the time of export, the exporter declares the value it expects to receive in the market outside India (FEMA section 7(1)(a)).
• Extra information: An exporter of goods must also give RBI any other information it needs to make sure the export proceeds are realised (FEMA section 7(1)(b)).
• RBI directions: RBI may direct any exporter to meet requirements it thinks fit so that the full export value, or a reduced value RBI determines, is received without delay (FEMA section 7(2)).
• Services: Every exporter of services must furnish a declaration with true and correct material particulars about payment for those services (FEMA section 7(3)).
• Realisation: Where foreign exchange is due or has accrued to a person resident in India, that person must take all reasonable steps to realise and repatriate it to India within the period and manner RBI specifies (FEMA section 8).
• Meaning of export: FEMA defines export as taking goods out of India to a place outside India, and providing services from India to any person outside India (FEMA section 2(l)).

The Act sets the duties in broad terms and leaves the form, period and manner to RBI. RBI fills in those details through regulations. From 1 October 2026 those details sit in the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, which RBI made using its powers under Section 7, Section 8, Section 10(6) and Section 47(2) of FEMA. For a wider overview, see FEMA rules for exports.

Sections 7 and 8 of FEMA apply to anyone in India who exports goods or services. The Act draws no line by business size or legal form, so a sole freelancer has the same declaration and realisation duties as a large company. The regulations set out a few exclusions and simpler routes for small invoices.

An exporter complies with Sections 7 and 8 of FEMA by declaring each export on the Export Declaration Form (EDF) and then receiving the full export value through an AD bank within the realisation period. The AD bank records both steps in EDPMS and closes the entry once the money arrives.

1. Raise the invoice for the full value of the goods or services. Section 7 asks for the full export value, or the expected value for goods when the full value is not known at shipment (FEMA section 7(1)(a)).
2. Declare the export on the EDF. For goods, this happens at the time of export, and at EDI ports the shipping bill counts as the EDF (Regulation 3(1)). For services, file within 30 days from the end of the month in which you raised the invoice (Regulation 3(2)). See EDF form for exports.
3. Use one EDF a month if you have several service invoices. A services exporter may submit a single EDF for all exports to one or more recipients in a month (Regulation 3(2)(a)).
4. Receive payment in the manner RBI allows. Receipts must follow the Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2023 (Regulation 4(1)).
5. Realise the full export value within nine months from the date of shipment for goods, or from the invoice date for services (Regulation 5(1)(a)). The period is twelve months if the export is invoiced or settled in Indian rupees (Regulation 5(1), first proviso).
6. Let the AD bank close the EDPMS entry. The bank credits your account after checking the transaction is genuine and closes or updates the EDPMS entry at the same time (Regulation 4(2)). See EDPMS closure.
7. Ask the AD bank before the deadline if payment will be late or short. The bank may extend the period or allow a reduction in value if it is satisfied with your reasons (Regulations 5(1) and 6).

The deadlines under Sections 7 and 8 of FEMA come from the 2026 regulations. The EDF is due at the time of export for goods and within 30 days from the end of the invoice month for services. Payment is due within nine months, or twelve months for rupee invoicing or settlement, unless the AD bank extends it.

An exporter who breaks Section 7 or Section 8 of FEMA, or the regulations made under them, can be penalised after adjudication under Section 13. Exports left unrealised for more than a year past the due date also restrict how the exporter can be paid for future exports.

• Penalty: A person who contravenes the Act or any regulation, direction or order under it is liable, upon adjudication, to a penalty up to three times the sum involved where it is quantifiable, or up to ₹2 lakh where it is not (FEMA section 13(1)).
• Daily penalty: For a continuing contravention, a further penalty of up to ₹5,000 can apply for every day after the first day (FEMA section 13(1)).
• Confiscation: The Adjudicating Authority may also order confiscation of the currency or property involved and direct that foreign exchange holdings be brought back into India (FEMA section 13(2)).
• Future exports: If export proceeds stay unrealised for more than one year beyond the due date or extended date, further exports can be made only against full advance or an irrevocable Letter of Credit (Regulation 13). See export proceeds not realised.
• Caution list: Exporters on RBI's caution list as on 30 September 2026 remain governed by the earlier order until they are removed from the list (Regulation 13, proviso). See RBI exporter caution list.
• Compounding: A contravention under Section 13 can be compounded on application, within 180 days from receipt of the application (FEMA section 15(1)). RBI's directions set an application fee of ₹10,000 plus GST (A.P. (DIR Series) Circular No. 17 of 2024-25, para 3.2).

If an invoice is close to its deadline, ask your AD bank for an extension under Regulation 5(1) or a reduction under Regulation 6 before it lapses, with written reasons and buyer correspondence. If a breach has already happened, a compounding application can be filed with RBI (A.P. (DIR Series) Circular No. 17 of 2024-25, para 3.1). See extension of export realisation period and FEMA penalties and compounding.

Sections 7 and 8 of FEMA are applied to exporters through the 2026 export and import regulations and A.P. (DIR Series) Circular No. 20, both effective from 1 October 2026. Penalties and compounding come from Sections 13 and 15 of the Act and RBI's 2024 compounding directions.

• Size myth: Some exporters assume FEMA applies only to companies. Section 7 covers every exporter of goods and every exporter of services, with no turnover threshold in the Act (FEMA section 7).
• Old deadlines: Older guides cite the superseded Master Direction on Export of Goods and Services. From 1 October 2026 the current deadlines are in the 2026 regulations (Circular No. 20, para 4).
• Superseded periods: Some summaries of the 2026 regulations quote the periods as first notified in January 2026: fifteen months, or eighteen months for rupee exports. The September 2026 amendment replaced these with nine and twelve months (Regulation 5, footnotes 2 to 4).
• Late requests: Waiting until after the deadline to ask for an extension. The AD bank may allow more time when the exporter asks and cites reasons for the delay, so raise the request with your AD bank as early as possible (Regulation 5(1), second proviso).
• Partial value: Declaring only the amount expected after fees or discounts. Section 7 asks for the full export value, and any shortfall is handled later as a reduction through the AD bank (Regulation 6).
• Split banks: Receiving an advance through one bank and the balance through another without telling both banks (Regulation 10(1)).

Every rule, deadline and form on this page is linked to its official source, checked on the dates below.

1. The Foreign Exchange Management Act, 1999 (Act No. 42 of 1999), text hosted by IFSCA, Sections 2(l), 7(1), 7(2), 7(3), 8, 13(1), 13(2) and 15(1) (checked 8 Oct 2026)
2. Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, Notification No. FEMA 23(R)/2026-RB dated 13 January 2026, amended up to 22 September 2026, Preamble; Regulations 1(2), 2(1), 3, 4, 5 with footnotes 2 to 4, 6, 7, 10(1), 13 with footnote 5, 18(1)(b) and (e), 19 (checked 8 Oct 2026)
3. RBI A.P. (DIR Series) Circular No. 20, RBI/2025-26/194: Export and Import of Goods and Services, 16 January 2026, Paras 1, 4 and 7 (checked 8 Oct 2026)
4. RBI A.P. (DIR Series) Circular No. 17, RBI/FED/2024-25/78: Directions - Compounding of Contraventions under FEMA, 1999, 1 October 2024, Covering letter; paras 1.1 to 1.3, 3.1 and 3.2 (checked 8 Oct 2026)