Centre Mandates Govt. Route For Investments With Beneficial Ownership Linked To Border Countries

The Centre has mandated that investments into India in non-debt instruments, including equity, by entities or individuals from countries sharing a land border with India, as well as investments where the beneficial ownership is traceable to such countries, must be made only through the Government approval route, under amendments notified on May 1, 2026. The Ministry of Finance, Department of Economic Affairs, brought into force the Foreign Exchange Management (Non-debt Instruments) (Amendment)...

Delhi High Court Sets Aside FEMA Confiscation For Lack Of Reasons, Upholds Penalty

The Delhi High Court has set aside confiscation orders passed under the Foreign Exchange Management Act, 1999 (FEMA), holding that such action cannot be sustained in the absence of reasons.A Division Bench of Justices Navin Chawla and Ravinder Dudeja partly allowed a batch of appeals filed against orders of the Appellate Tribunal for Foreign Exchange, which had affirmed penalties as well as confiscation of funds lying in Non-Resident (Non-Repatriable) Rupee (NRNR) accounts.The case arose from...

SAFEMA Tribunal Upholds ₹5 Crore Penalty on J.B. Diamonds For FEMA Violation

The Appellate Tribunal under SAFEMA, New Delhi, has upheld a penalty of Rs. 5 crore imposed on J.B. Diamonds Ltd. for failure to realise export proceeds exceeding USD 117 million within the prescribed period under the Foreign Exchange Management Act, 1999, while also affirming the liability of its directors. The tribunal, however, granted relief to one director—a homemaker holding that she was not involved in the day-to-day affairs of the company. A coram led by Chairman Justice Munishwar...

Adjudicating Authority Abdicated Appellate Powers, Supreme Court Sets Aside FEMA Order Passed Pending Appeal

The Supreme Court has set aside a Madras High Court judgment and a final adjudication order under the Foreign Exchange Management Act, holding that the Adjudicating Authority acted improperly by effectively overriding an order refusing to confirm seizure while that order was under appeal. A Bench of Justices Vikram Nath and Sandeep Mehta observed, “In effect, the Adjudicating Authority has undone the order of the Competent Authority even while the appeal against the said order is pending. Such...

SAFEMA Tribunal Confirms ₹50 Lakh ED Attachment In Syndicate Bank Bribery Case Linked To Former CMD

The Appellate Tribunal under SAFEMA on 12 March held that the provisional attachment of Rs. 50 lakh recovered from the close relatives of Syndicate Bank's former CMD constitutes proceeds of crime under the Prevention of Money Laundering Act (PMLA). A Bench comprising Members Balesh Kumar and Rajesh Malhotra allowed the appeal filed by the Directorate of Enforcement (ED), setting aside the order of the Adjudicating Authority, which had earlier declined to confirm the provisional attachment of...

Damages Awarded By Foreign Court Cannot Be Subject To FEMA, RBI Ceiling: Delhi High Court

The Delhi High Court on Monday held that damages awarded by a competent foreign court for breach of contract cannot be subjected to ceilings prescribed under the Foreign Exchange Management Act or RBI guidelines. “In my considered view, the amounts awarded by a competent Court, whether Indian or foreign, towards damages for breach of contract, cannot be subject to ceilings prescribed under FEMA and/or RBI directions/circulars,” Justice Amit Bansal observed while allowing execution of an English...

SAFEMA Tribunal Sets Aside Forfeiture Of Property Bought Nine Years Before Smuggling Offence

A property purchased nine years before a smuggling offence cannot be forfeited on mere assumption that it was funded through illegal earnings, the Appellate Tribunal under SAFEMA has held, setting aside a 2023 forfeiture order against a Karaikal resident. The tribunal held that the competent authority failed to establish any “link or nexus” between the 1990 purchase of the property and a 1999 smuggling case. Member V. Anandarajan observed that the authority had acted on assumption without...

FEMA Can Be Invoked For EEZ Exports With Foreign Exchange Implications: SAFEMA Tribunal, New Delhi

The Appellate Tribunal under SAFEMA at New Delhi has held that, in the facts of the case, activities carried out in India's Exclusive Economic Zone (EEZ) that have foreign exchange implications can be proceeded against under the Foreign Exchange Management Act (FEMA), even in the absence of a specific notification extending FEMA to the EEZ. Rejecting the argument that FEMA could not apply without such a notification, the tribunal held: “We do not find it necessary in the set of facts and...

RBI Brings Exports, Imports and Merchanting Trade Under Single FEMA Framework

The Reserve Bank of India has notified a new set of foreign exchange rules that bring exports, imports, and merchanting trade transactions under a single regulatory framework for the first time.The Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 replace the 2015 rules, which were limited to exports of goods and services.The regulations were notified on January 13, 2026, under the Foreign Exchange Management Act, 1999. They will come into force on October...

Legal Heirs Have Right To Seek Impleadment In Pending Appeals Under FEMA: Delhi High Court

The Delhi High Court has observed that legal heirs have right to seek Impleadment after the appellant's death in pending appeals under the Foreign Exchange Regulation Act, 1973, and the Foreign Exchange Management Act, 1999. “…the right to seek impleadment of legal heirs in such circumstances is not one that arises dehors the statute; rather, it is one that is expressly recognised and preserved within the statutory framework of both FERA, 1973 and FEMA, 1999,” Justice Swarana Kanta Sharma...

FERA | ED Can Seize Indian Currency Intended For Illegal Purchase Of Foreign Exchange: Delhi High Court

The Delhi High Court has made it clear that Indian currency can be seized by the Enforcement Directorate under provisions of the erstwhile Foreign Exchange Regulation Act, 1973, if the same is intended to be used for illegal purchase of foreign exchange.FERA, 1973 was enacted to regulate the inflow and outflow of foreign exchange in India, and to prevent hoarding of foreign currency. The statute has since been replaced by the Foreign Exchange Management Act, 1999, which came into effect in June...

Enforcement Officer Competent To File Complaint Under Repealed Provisions Of FERA During Sunset Period Of 2 Years After Enforcement Of FEMA: Supreme Court

The Supreme Court has ruled that the Enforcement Officer appointed and authorised under the repealed provisions of the Foreign Exchange Regulation Act, 1973 (FERA), will continue to have the authority and competence to file a complaint for the offences punishable under the Act before the expiry of the sunset period of 2 years provided under Section 49(3) of the Foreign Exchange Management Act, 1999 (FEMA).The bench of Justices Abhay S. Oka and Sanjay Karol was hearing an appeal against the order...