Foreign Exchange Management Act (FEMA), 1999
FEMA, 1999 replaced the Foreign Exchange Regulation Act (FERA), 1973 — a shift from a punitive, control-oriented regime to a facilitation-oriented one. It governs all foreign exchange transactions in India, including capital account transactions such as NRI investment in Indian securities.
- Enacted: 29 December 1999; came into force 1 June 2000.
- Core principle: Current account transactions are generally permitted unless expressly prohibited; capital account transactions are prohibited unless expressly permitted.
- Administered by: Reserve Bank of India (for most foreign exchange matters) and the Enforcement Directorate (for FEMA violations/investigations).
- Non-Debt Instruments (NDI) Rules, 2019 (under FEMA): Govern FDI and portfolio investment — the specific rules applicable to NRI equity investment in listed companies.
- FERA vs FEMA: Under FERA, violation was a criminal offence; under FEMA, it is a civil offence with financial penalties.
- Budget 2026 proposes to simplify FEMA's NDI rules to reduce compliance burden and encourage more NRI participation.
● Tracked since February 10, 2026 · last seen August 02, 2026 · updates as the daily brief publishes
See it in today’s brief.
Daily current affairs with every static concept explained in place.
Read the daily brief