The Reserve Bank of India (RBI) has amended foreign exchange reporting requirements for small exporters and importers of services, significantly reducing compliance burdens for resident individuals and businesses handling transactions below ₹10 lakh. The changes, notified on Tuesday through the Foreign Exchange Management (Export and Import of Goods and Services) (Second Amendment) Regulations, 2026, took effect retrospectively from 1 October 2026.

What Changed for Service Exporters

Under the amended framework, resident individual service exporters will now be deemed to have submitted the Export Declaration Form (EDF) automatically, once they provide payment-related information to their authorised dealer bank for crediting proceeds to their accounts. This removes the need for a separate EDF filing, streamlining what was previously a multi-step process.

For exporters other than resident individuals — such as firms or companies — the same simplified treatment applies provided the inward remittance for the service does not exceed ₹10 lakh or its equivalent in foreign currency. Transactions above that threshold continue to follow existing reporting protocols.

Eased Import Reporting Under IDPMS

The RBI has also relaxed reporting requirements for service imports under the Import Data Processing and Monitoring System (IDPMS). Under the revised rules, authorised dealer banks are required to enter service import details in IDPMS within five working days of receiving the relevant details — but only for importers other than resident individuals, and only where the invoice or contract value exceeds ₹10 lakh.

This effectively removes the IDPMS reporting obligation entirely for resident individuals, and also exempts other importers undertaking service imports valued at up to ₹10 lakh. The notification further clarifies the definition of a resident individual as 'a person resident in India who is a natural person,' distinguishing them from companies and other business entities.

Background and Context

The amendments build on the principal FEMA regulations notified on 13 January, which were subsequently amended in September. The latest revision represents the second amendment to those regulations in 2026. Notably, India's services export sector has grown substantially in recent years, with IT, consulting, and freelance digital services accounting for a significant share of foreign exchange inflows. Compliance costs for small exporters and individual freelancers had long been flagged as a friction point by industry bodies.

Impact on Small Exporters and Freelancers

The changes are expected to directly benefit individual freelancers, consultants, and small businesses that export services — a segment that has expanded rapidly with India's growing gig and digital economy. By removing the EDF filing requirement for individuals and the IDPMS entry for sub-₹10 lakh transactions, the RBI is aligning compliance norms more closely with the scale and nature of such transactions.

Industry observers note that the retrospective effective date of 1 October 2026 also provides relief for those who had already completed transactions without full compliance under the older framework. Going forward, the simplification is likely to encourage more small service providers to route foreign payments through formal banking channels.