DGFT Notification No. 30/2026-27: A Major Shift in Treatment of INR Export Realisations.

The Directorate General of Foreign Trade (DGFT), Department of Commerce, has issued Notification No. 30/2026-27 dated 20 August 2026, amending paragraphs 2.52 and 2.53 of the Foreign Trade Policy (FTP) 2023 with immediate effect.

The amendment is significant because it changes the manner in which export contracts may be denominated and, more importantly, substantially broadens the recognition of export proceeds realised in Indian Rupees for purposes of FTP export benefits, incentives and fulfilment of export obligations. The stated objective is to align the FTP with the Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2023. RBI's regulations already provide that, for trade transactions with countries other than ACU member countries, receipts and payments may be made in Indian Rupees or any foreign currency.

This amendment therefore represents an important step towards bringing India's foreign-trade policy framework in line with the evolving regulatory framework for internationalisation of the Indian Rupee.

What has changed?

Under the earlier FTP framework, the general rule was that export contracts and invoices could be denominated in freely convertible currency or INR, but export proceeds generally had to be realised in freely convertible currency.

INR realisation was permitted only through specified mechanisms, principally involving Vostro arrangements and the Special Vostro Account framework. FTP benefits for INR realisations were correspondingly subject to specific conditions.

The new framework adopts a much simpler country-based approach.

1. Exports to countries other than ACU members

For exports to countries other than members of the Asian Clearing Union (ACU), export contracts and invoices may now be denominated in:

• foreign currency; or
• Indian Rupees.

More importantly, the export proceeds may be realised in:

• any foreign currency; or
• Indian Rupees.

This is a significant relaxation because the expression "freely convertible currency" has effectively been replaced, for these transactions, by the broader concept of "foreign currency", while INR realisation is expressly recognised.

2. ACU transactions

For ACU member countries other than Nepal and Bhutan, export contracts are to be denominated in the currency determined by the ACU. However, the transactions may also be denominated and settled in accordance with RBI directions issued from time to time.

This is important because the FTP is no longer attempting to prescribe a payment mechanism independently of RBI's foreign-exchange framework.

3. Nepal and Bhutan

Exports involving Nepal and Bhutan continue to have a special treatment. Contracts may be denominated and settled in Indian Rupees or in accordance with RBI directions. Export contracts and invoices under EXIM Bank/Government of India lines of credit may also be denominated in INR.

Why has this amendment been brought?

The principal reason is regulatory alignment. The RBI introduced the Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2023 under FEMA. Those regulations replaced the earlier 2016 framework and expressly provide a differentiated approach to trade transactions.

Under the RBI framework:

• Nepal and Bhutan have their own INR-based treatment;
• ACU countries are subject to the ACU mechanism or RBI directions; and
• countries other than ACU members may use INR or any foreign currency for trade transactions.

The RBI itself has described the 2023 regulations as supporting the internationalisation of the Indian Rupee and local-currency settlement with partner countries.

Reserve Bank of India

The problem was that the foreign-exchange regulations and the FTP were not completely synchronised. In other words, a transaction could be permissible from a FEMA/RBI perspective but the exporter could still face uncertainty regarding whether the INR realisation would qualify for benefits under the FTP. The DGFT amendment addresses this disconnect. The policy direction is therefore clear:

• If an INR-based export transaction is permissible under the applicable RBI/FEMA framework, the FTP should not unnecessarily treat the INR realisation differently from a foreign-currency realisation for export-policy purposes.

This is particularly relevant as India increasingly seeks to promote INR-denominated international trade and local-currency settlement.

The biggest impact: FTP export benefits

The most important change is in paragraph 2.53. The revised provision states that exports to countries other than Nepal and Bhutan, where export proceeds are realised in INR through banking channels by credit to INR accounts of person's resident outside India, opened in accordance with the Foreign Exchange Management (Deposit) Regulations, as amended from time to time, will be eligible for export benefits/incentives and fulfilment of Export Obligations under the FTP at par with exports realised in foreign currency.

This is a major policy change. Previously, the eligibility of INR realisations was linked to specific permitted mechanisms and circumstances. The amended provision substantially broadens the principle: INR realisation, where compliant with the applicable banking/FEMA framework, can qualify for FTP purposes on the same footing as foreign-currency realisation.

That can have consequences across several export-promotion mechanisms.

Impact on Advance Authorisation

Advance Authorisation allows duty-free import/procurement of inputs subject to fulfilment of prescribed export obligations. The amendment can make INR-denominated exports more useful for exporters holding Advance Authorisations. Where an export obligation is required to be fulfilled through eligible exports, the key question is whether the export proceeds qualify under the FTP. With the revised paragraph 2.53, eligible INR realisations should no longer be disadvantaged merely because the customer has paid in INR rather than foreign currency. This could be particularly useful for exporters participating in bilateral/local-currency trade arrangements.

However, exporters must continue to satisfy the other conditions of the Advance Authorisation scheme. The amendment does not mean that every INR transaction automatically fulfils every export obligation. The transaction must still satisfy the applicable FTP, Handbook of Procedures, RBI/FEMA and documentation requirements.

Impact on EPCG

The same principle is relevant for the Export Promotion Capital Goods (EPCG) Scheme. EPCG holders have export obligations linked to the authorisation. The amendment can facilitate fulfilment of such obligations through eligible exports where consideration is received in INR in a manner permitted by the applicable FEMA/RBI framework. This could remove a practical concern for exporters who have customers willing to transact in INR but who previously had to structure the transaction carefully to ensure that the resulting realisation qualified for FTP purposes.

Thus, the amendment potentially makes INR settlement more commercially usable for exporters with EPCG obligations.

Impact on RoDTEP and other export incentives

The amendment is also relevant to export incentives/remission schemes. The wording of revised paragraph 2.53 specifically recognises INR-realised exports as eligible for:

• export benefits;
• incentives; and
• fulfilment of export obligations.

Accordingly, an exporter should not lose eligibility for an applicable FTP benefit merely because an otherwise valid export transaction has been settled in INR. For schemes such as RoDTEP, however, the exporter must still comply with the scheme-specific eligibility conditions, exclusions, rate structures, electronic documentation and claim procedures. The amendment changes the currency-realisation eligibility principle; it does not override the individual conditions of each export-promotion scheme.

What about GST refund?

This is an important area where exporters should distinguish between FTP eligibility and GST law. The DGFT notification does not itself amend the GST law. Therefore, it would be incorrect to conclude that the notification automatically creates a new GST refund entitlement.

Under the GST framework, exports are treated as zero-rated supplies subject to the conditions of the IGST Act and the applicable rules. Consequently, the DGFT amendment should be understood as follows:

FTP benefits - INR export realisation, where compliant with the revised FTP/RBI framework, can qualify for applicable FTP benefits and export-obligation fulfilment.

GST refund - GST refund eligibility continues to be governed by the IGST Act, CGST Act, CGST Rules, GST notifications/circulars and the applicable procedural requirements.

Therefore, an exporter receiving export proceeds in INR should not assume that the DGFT notification by itself settles every GST-refund question. This distinction is particularly important because the legal tests under the foreign-trade policy and GST legislation are not identical.

Could INR exports therefore become easier for GST refund purposes?

Potentially, but indirectly rather than automatically. The DGFT amendment removes or reduces one major policy-level obstacle: the treatment of INR realisation for FTP purposes. For GST purposes, the exporter will still need to demonstrate that the transaction qualifies as an export/zero-rated supply and satisfy the applicable refund requirements.

There may therefore be a practical distinction between:

• "Is the INR receipt eligible as export realisation under FTP?"

and

• "Is the transaction eligible for GST refund under the GST law?"

The answer to the first question is materially improved by Notification No. 30/2026-27. The second question continues to require examination under GST legislation. Exporters should consequently avoid treating the DGFT notification as a standalone amendment to GST refund provisions.

A significant compliance benefit for exporters

The amendment should also reduce the need for exporters to structure transactions merely around the currency in which the customer makes payment.

For example, consider an Indian exporter selling goods worth Rs. 1 crore to a customer in a non-ACU country.

Previously, if the commercial arrangement contemplated INR settlement, the exporter had to examine whether the particular payment mechanism fell within the permitted FTP framework for receiving export benefits.

Under the revised framework, the basic policy position becomes considerably clearer:

Where the INR receipt is made through an authorised banking channel and complies with the applicable FEMA/RBI framework, the INR realisation can qualify for FTP benefits and export-obligation purposes. This gives exporters greater flexibility in negotiating payment terms with overseas buyers.

The amendment also supports internationalisation of the Indian Rupee The broader economic significance should not be overlooked. India has been progressively developing mechanisms that permit international trade to be settled in INR.

The RBI's 2023 regulations expanded and rationalised the framework for trade payments, including INR and foreign-currency settlement for transactions with countries outside the ACU.

The DGFT amendment complements that policy. If exporters can invoice in INR, receive INR through permissible banking channels and still obtain FTP benefits, the commercial incentive to use INR in international trade increases.

This could contribute to:

• greater use of INR in cross-border trade;
• reduced dependence on foreign currencies for eligible transactions;
• potentially lower currency-conversion exposure in some transactions;
• greater flexibility in negotiating international payment terms; and
• deeper integration of India's trade-policy and foreign-exchange frameworks.

What exporters should do now?

Exporters should review their existing and future contracts in light of the amendment.

1. Review payment clauses - Export contracts with overseas customers should be reviewed to determine whether INR invoicing and settlement can provide a commercial advantage.

2. Confirm the customer's country - The distinction between:

• ACU member countries;
• Nepal and Bhutan; and
• other countries

remains important. The revised paragraph 2.52 does not create one uniform currency regime for every export destination.

3. Obtain clarity from the authorised dealer bank - The banking channel remains critical. Exporters should ensure that the proposed INR settlement mechanism is permissible under the applicable RBI/FEMA framework and that the bank can appropriately report and evidence the transaction.

4. Maintain proper export-realisation documentation - Exporters claiming FTP benefits should maintain appropriate documentation linking:

• shipping/export documents;
• invoices;
• banking records;
• export realisation;
• e-BRC/related evidence, as applicable; and
• the relevant authorisation or incentive claim.

5. Examine GST separately - The DGFT amendment should not be used as the sole basis for a GST refund claim. Exporters should separately verify the GST requirements applicable to their transaction and refund route.

Practical example - Suppose an Indian manufacturer exports machinery worth Rs. 50 lakhs to a buyer in a non-ACU country. The buyer and seller agree to denominate the contract in INR and the buyer makes payment through a permitted banking arrangement. Under the amended FTP framework, the fact that the exporter receives Rs. 50 lakhs rather than a foreign currency amount does not, by itself, prevent the transaction from being recognised for FTP benefits or export-obligation fulfilment, provided the transaction satisfies the applicable FEMA/RBI and FTP requirements. If the exporter has an eligible export obligation under an FTP scheme, the INR realisation can therefore become significantly more useful.

However, if the exporter also wants to claim a GST refund, the exporter must independently establish eligibility under GST law.

What the amendment does not do?

The notification should not be interpreted too broadly. It does not mean:

• every INR payment from an overseas customer automatically qualifies as an export realisation;
• every INR export automatically qualifies for every FTP incentive;
• every INR transaction automatically qualifies for GST refund;
• RBI/FEMA compliance is no longer required;
• ACU transactions can freely ignore ACU rules; or
• scheme-specific conditions under Advance Authorisation, EPCG, RoDTEP or other schemes have been removed.

Rather, the central change is the recognition of eligible INR export realisations within the FTP framework.

Overall impact

Notification No. 30/2026-27 is more than a technical amendment to paragraphs 2.52 and 2.53. It removes an important policy mismatch between the foreign-exchange regulatory framework and the foreign-trade policy framework. The RBI framework already permits broader INR and foreign-currency settlement arrangements for trade transactions. The DGFT amendment now brings the FTP's treatment of export realisation closer to that framework.

• For exporters, the principal benefit is greater currency flexibility without necessarily sacrificing FTP benefits or export-obligation fulfilment.
• For export-promotion schemes, the amendment potentially expands the practical universe of transactions that can support benefits where INR realisation is permitted.
• For GST, however, the effect should be viewed more cautiously: the notification strengthens the recognition of INR export realisation under FTP, but it does not independently amend GST refund law.

The larger policy message is nevertheless clear: India is moving towards a trade ecosystem in which the Indian Rupee can play a greater role in international commerce while exporters continue to receive policy treatment comparable to foreign-currency transactions, subject to the applicable legal and procedural conditions.

Conclusion

The amendment to FTP 2023 marks a significant step towards simplifying the treatment of INR-denominated exports. By allowing export contracts and invoices for non-ACU countries to be denominated in INR or foreign currency and recognising eligible INR realisations for FTP benefits and export-obligation purposes, DGFT has provided exporters with greater flexibility in structuring international transactions.

The real benefit will be felt by exporters who have access to buyers willing to transact in INR, particularly where foreign-exchange conversion creates cost, volatility or administrative complications. At the same time, exporters should maintain a clear distinction between DGFT/FTP eligibility, FEMA/RBI compliance and GST refund eligibility. The three frameworks interact, but one does not automatically replace the requirements of the others.

The amendment should therefore be welcomed as a significant policy step towards internationalisation of the Indian Rupee, greater flexibility for Indian exporters and closer alignment between India's foreign-trade and foreign-exchange regulatory regimes.

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Note: This article analyses the notification text supplied in the question together with the RBI framework. For an actual export transaction or GST refund claim, the specific transaction structure, destination country, banking route and applicable scheme provisions should be separately verified.

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