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Foreign Exchange Management (Export and Import of Currency) (Amendment) Regulations, 2026

March 16, 2026 5 min read Economics Polity & Governance GS Paper 3 (Economics Indian Economy External Sector)
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What Happened

  • The Reserve Bank of India, exercising powers under Section 47(2)(ga) of the Foreign Exchange Management Act, 1999 (FEMA), notified an amendment to the Foreign Exchange Management (Export and Import of Currency) Regulations, 2015, through Notification No. FEMA 6(R)/(5)/2026-RB, dated February 23, 2026 (published in the Official Gazette on February 24, 2026).
  • The amendment inserts a new Annex into the Principal Regulations — the Currency Declaration Form (CDF) — which passengers arriving in India must submit to Customs when they carry foreign exchange exceeding US$10,000 (aggregate) or foreign currency notes exceeding US$5,000 (or their equivalent).
  • The CDF standardises the declaration process, capturing details of currency type, denomination, amount, and traveller's cheques; it also includes a section for Customs officer certification and a space for bank/money-changer endorsements tracking subsequent encashment.

Static Topic Bridges

Foreign Exchange Management Act, 1999 (FEMA) — Framework and Objectives

The Foreign Exchange Management Act, 1999 replaced the Foreign Exchange Regulation Act, 1973 (FERA), fundamentally shifting the philosophy of foreign exchange regulation from a punitive, criminal law-based approach to a civil law, management-oriented framework. Under FERA, exchange control violations were criminal offences (reversing the burden of proof onto the accused). FEMA reconstituted violations primarily as civil contraventions attracting penalties, reserving criminal sanctions only for cases involving money laundering and terrorist financing (handled under PMLA, 2002). FEMA is administered jointly by the Reserve Bank of India (for current account transactions and exchange management) and the Enforcement Directorate (for capital account violations and money laundering investigations).

  • FEMA enacted: December 29, 1999; came into force June 1, 2000.
  • FERA replaced: Was a draconian statute; mere possession of foreign exchange was an offence unless permitted.
  • FEMA's key philosophical shift: Treats foreign exchange transactions as a management issue, not a criminal activity per se.
  • Enforcement Directorate (ED): Investigates FEMA violations under Section 37 (power to arrest limited to serious cases); also investigates money laundering under PMLA.
  • RBI's role: Issues regulations, grants permissions for current account transactions (fully liberalised since 2000) and capital account transactions (progressively liberalised).

Connection to this news: The 2026 CDF amendment is an exercise of RBI's regulatory power under FEMA to improve monitoring of currency flows — a management function consistent with FEMA's philosophy of facilitation with oversight, rather than prohibition.

Section 47 of FEMA — Regulation-Making Power of RBI

Section 47 of FEMA grants the Reserve Bank of India the power to make regulations to carry out the provisions of the Act and any rules made thereunder. Specifically, Section 47(2)(ga) empowers the RBI to frame regulations relating to the export and import of currency notes, bank notes, and coins. The Principal Regulations — Foreign Exchange Management (Export and Import of Currency) Regulations, 2015 — were originally notified as Notification No. FEMA 6(R)/2015-RB and have been amended periodically.

  • Section 47(2): Lists specific areas for which RBI may make regulations, including currency export/import (clause ga), capital account transactions, and current account transactions.
  • The RBI notifies regulations in the Official Gazette; they have the force of delegated legislation.
  • The hierarchy: FEMA (Parliamentary Act) → Rules (Central Government, Ministry of Finance) → Regulations (RBI) → Circulars/Master Directions (RBI, operational guidance).
  • Master Direction on Import of Goods and Services and Master Direction on Export of Goods and Services are the primary operational documents under which FEMA is administered on a day-to-day basis.
  • The Liberalised Remittance Scheme (LRS) allows Indian residents to remit up to USD 250,000 per financial year for permissible current and capital account transactions.

Connection to this news: The CDF amendment is a Regulation under Section 47(2)(ga) — it is below the level of parliamentary scrutiny (unlike an Act) and comes into force immediately upon Gazette publication, without requiring parliamentary approval.

Currency Declaration Form (CDF) — Customs and FEMA Interface

The Currency Declaration Form (CDF) is a declaration submitted by incoming passengers to Customs authorities when carrying foreign exchange above the prescribed thresholds. It serves as an intersection of FEMA (RBI-administered) and the Customs Act, 1962 (CBIC-administered). By formalising the CDF as an Annex to the FEMA Regulations, the RBI standardises what was previously handled through operational instructions and custom practice. This improves traceability, anti-money laundering (AML) compliance, and Financial Intelligence Unit-India (FIU-IND) reporting.

  • Declaration thresholds: (a) Aggregate foreign exchange (notes + traveller's cheques) exceeding US$10,000 or equivalent; AND/OR (b) Foreign currency notes alone exceeding US$5,000 or equivalent.
  • No CDF needed below both thresholds simultaneously — below US$10,000 aggregate and below US$5,000 in cash, no declaration required.
  • CDF is submitted to Customs on arrival; Customs officer certifies and retains a copy; the passenger retains a copy for encashment endorsements.
  • Financial Action Task Force (FATF): India is a member; FATF Recommendation 32 requires countries to declare cross-border transportation of cash and negotiable instruments above a defined threshold; the CDF is India's implementation mechanism.
  • PMLA, 2002, Section 12: Reporting entities (banks, money exchangers) must maintain records of all transactions above ₹10 lakh; CDF endorsements at encashment feed into this reporting requirement.

Connection to this news: The 2026 amendment inserts the standardised CDF form directly into the FEMA Regulations, replacing ad hoc practices. This ensures the form has regulatory-level legal backing and strengthens India's compliance with FATF Recommendation 32 on cross-border currency declaration.

Key Facts & Data

  • Notification: FEMA 6(R)/(5)/2026-RB, dated February 23, 2026; published Official Gazette February 24, 2026.
  • Statutory authority: Section 47(2)(ga) of FEMA, 1999.
  • CDF declaration threshold: Foreign exchange aggregate exceeding US$10,000 OR foreign currency notes exceeding US$5,000.
  • Principal Regulations being amended: Foreign Exchange Management (Export and Import of Currency) Regulations, 2015 (Notification No. FEMA 6(R)/2015-RB).
  • FEMA replaced FERA in 2000; key shift from criminal to civil law approach.
  • India became a FATF member in 2010; undergoes mutual evaluation reviews periodically.
  • The Enforcement Directorate investigates serious FEMA contraventions; penalties can be up to 3x the amount involved in contravention.
  • LRS annual remittance limit: USD 250,000 per resident per financial year (current as of 2026).