Export from India in Indian Rupees

[Mukund Honkan]

We need to do export from India to US or Eurpoean Countries, invoicing will be in Indian Rupees.

will there be any issue from FEMA point of view if we do invoicing in Indian Rupees

 

Regards,

 

Mukund M Honkan

[Guest]

Dear Sir,

in terms of Para 2.40 of the Foreign Trade Policy (August 27, 2009 - March 31, 2014), “All export contracts and invoices shall be denominated either in freely convertible currency or in Indian Rupees but export proceeds shall be realised in freely convertible currency. However, export proceeds against specific exports may also be realised in rupees provided it is through a freely convertible Vostro account of a non-resident bank situated in any country, other than a member country of the ACU or Nepal or Bhutan”.

Indian Rupee is not a freely convertible currency, as yet.

All transactions between a person resident in India and a person resident in Nepal or Bhutan may be settled in Indian Rupees. However, in case of export of goods to Nepal, where the importer has been permitted by the Nepal Rashtra Bank to make payment in free foreign exchange, such payments shall be routed through the ACU mechanism.

[Mridul Sethi]

Sir, pls advise which are the freely convertible currencies.

 

Regards,

Mridul Sethi

[Guest]

Dear Sir,

 

Please find below freely convertible currency:-

Australian Dollar,Bahrain Dinar,Canadian Dollar,Danish Kroner,EURO,Hong Kong Dollar,Kenya Shilling,Kuwait Dinar,New Zealand Dollar,Norwegian Kroner,Pound Sterling,Singapore Dollar,South African Rand,Saudi Arabian Riyal,Swedish Kroner,Swiff Franc,UAE Dirham,US Dollar & Japanese Yen.

AI Summary

Export invoicing in Indian Rupees permitted but export proceeds must be realised in freely convertible currency or via Vostro arrangements. Export invoices may be denominated in Indian Rupees or in a freely convertible currency, but export proceeds must ordinarily be realised in a freely convertible currency; proceeds may be realised in rupees only if routed through a freely convertible Vostro account of a non resident bank situated outside ACU member countries, Nepal and Bhutan. The Indian Rupee is not treated as freely convertible, and special settlement rules apply for transactions with Nepal and Bhutan.