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ARTICLE · 19 SEPTEMBER 2024

The Compound Effect Of The New FEMA Compounding Rules

Obhan Mason
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Pursuant to the commitments made during the announcement of the Union Budget 2024-25, the Department of Economic Affairs of the Ministry of Finance...

IndiaFinance and Banking
Ashima Obhan
Ashima Obhan
Anubhav Chakravorty
Anubhav Chakravorty
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Pursuant to the commitments made during the announcement of the Union Budget 2024-25, the Department of Economic Affairs of the Ministry of Finance, notified the Foreign Exchange (Compounding Proceedings) Rules, 2024 on September 12, 2024 ("Rules") pursuant to Section 46 of the Foreign Exchange Management Act, 1999 ("Act"). The aforementioned Rules were notified in consultation with the Reserve Bank of India ("RBI"), with the intention to streamline and rationalize the extant framework and facilitate the ease of doing business in India.

The Rules focus on expediting and streamlining the processing of compounding applications, the introduction of digital payment options for application fees and compounding amounts, and on the simplification of the provisions to eliminate ambiguity.

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