Foreign Exchange Management Act

Sale of Foreign Exchange to public under Foreign Exchange Management Act (FEMA), 1999:

Foreign Currency in the form of notes or coins is allowed to be sold to out-going Indian travelers other than:

• Transit passengers with foreign passports.
• Holders of foreign passports who have open dated or return tickets issued outside India. Travelers’ tickets are required to be verified to ensure that
• They are traveling to the particular destination and are about to leave India and that they are eligible for sale according to the destinations indicated on the tickets.
• The tickets should be confirmed and indicate that the date of departure is not later than 60 days from the intended release of Foreign Exchange.

Basic Travel Quota

With effect from 1st June, 2000 resident Indian citizens including infants are allowed to receive Foreign Exchange not exceeding USD 2000 in case of currency note and USD 10,000 in the form of traveler checks or its equivalent in aggregate, in one calendar year for one or more personal visits abroad (except to Nepal and Bhutan) as against the quantum of exchange allowed under BTQ (para 10 of FLM).

Foreign Exchange for Business Visits

Eligible Travelers

Those sponsored by firms / companies / organizations in India Journalists deputed on short term assignments abroad by Newspapers / Journals Self - employed professionals like Solicitors, Chartered Accountants undertaking visits abroad in connection with their profession.

Documents Required

The traveler is required to produce a letter in duplicate from the sponsoring firm / company / organization or by himself / herself in the case falling under (c) above. The letter should cover the following points:

• Name, address, nationality and Passport no. of the traveler
• Duration and nature of visits to each country
• Amount of exchange required (not exceeding the quantum indicated below)
• Certificate that the expenses are being borne by the sponsor or by the traveler in the case falling under (c) above.

In case requested as Special Allowance, the letter should include declaration that the traveler is a Chief / Senior Executive in the organization (indicating his/her designation) and that he/she is entitled to draw exchange at the Special Scale as per the rules of the organization. The original letter and duplicate should be retained for your records.

Quantum of Exchange

Authorized dealers can release foreign exchange up to USD 25,000 for a business trip to any country other than Nepal and Bhutan. However, release of foreign exchange exceeding USD 25,000 for travel abroad (other than Nepal and Bhutan) for business purposes, irrespective of period of stay, requires prior permission from the Reserve Bank of India.

There are certain regulations pertaining to currency exchange that travelers visiting India need to be aware of:

Foreign Currency

Arrival in India

There are no restrictions on the amount offoreign currency comprising notes/coins, travelers’ checks, drafts drawn on banks in India or bank letters of credit, a tourist may bring into India. However, if the total amount of foreign currency notes/coins or travelers’ checks brought into India at one time, exceeds USD 10000 or its equivalent, it is required to be declared by the holder to the Indian Customs authorities on arrival on a Currency Declaration Form (CDF).

A copy of the CDF duly certified by the customs department is handed over, which the traveler is required to retain. This declaration is essential for the foreign traveler as it facilitates easy conversion of foreign currency into Indian currency and also reconversion of the unspent balance of Indian rupees into foreign currency at the time of departure from India.

Departure from India

At the time of departure from India, travelers are prohibited to take back Indian currency with them. Currency exchange counters are usually located at the airport alongside check-in counters. All Indian currency must be exchanged before immigration as these facilities are not available thereafter.

However, travelers going to Nepal from India can take with them, Indian currency in denominations of INR 100 and below, acquired out of sale of foreign exchange brought into India by them.

Process for Encashment of Foreign Currency

Currency should be exchanged only through authorized currency exchange agents and banks who will issue an Encashment Certificate that is required at the time of reconversion of any unspent money into foreign currency. Exchange of foreign currency other than through banks or authorized currency exchange agents is an offense under Foreign Exchange Regulations Act, 1973.

The authorized currency exchange dealer is required to make an entry of the amount of foreign currency exchanged on the Currency Declaration Form (if one was filled up by the traveler at the time of arrival in India) and also issue an Encashment Certificate showing details of foreign currency exchanged, rate of conversion and amount of INR paid.

Travelers are advised to obtain Encashment Certificates in their own names and necessary endorsements on the Currency Declaration Form, where applicable, in order to facilitate easy reconversion into foreign exchange of the Indian currency left with them at the time of their departure from India.

Unspent balances of Indian currency can be re-converted into foreign currency at the time of departure from India, only against Encashment Certificates, which are valid for 3 months from the date of their issue. In the absence of any Encashment Certificate, a maximum of INR 100 will be allowed to be converted into foreign currency at the exit point.