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What Is Foreign Exchange Management Act (FEMA)?

What Is Foreign Exchange Management Act (FEMA)?

The Government of India has framed the Foreign Exchange Management Act (FEMA), which is connected to the foreign direct investment in the nation. Foreign Exchange Management Act (FEMA) 1999 has supported the country by boosting external payment and trade.

The FEMA head-office, also famous as the Enforcement Directorate, is currently based in New Delhi and is controlled by its director. FEMA 1999 also has as many as 5 zonal offices in Mumbai, Delhi, Chennai, Kolkata and Jalandhar. Interestingly, every office is divided into 7 other (sub-zonal) offices with Assistant Directors as it’s head.

  1. Formulation of Foreign Exchange Management Act (FEMA), 1999:

    2. In 1999, the Indian government drafted the Foreign Exchange Management Act (FEMA).

    On the 1st of June, 2000, FEMA came into effect swapping the Foreign Exchange Regulation Act (FERA), which was drafted in 1973. Wide-ranging economic reforms were commenced in India in the early 1990s and this gave a way to the deregulation and liberalization of the country’s economy. Foreign Exchange Management Act (FEMA) was therefore formulated so as to be attuned with the policies of pro- liberalization of the Indian government.

  2. Scope of Foreign Exchange Management Act (FEMA):

    3. Foreign Exchange Management Act (FEMA), 1999 is valid in the entire country, with Mumbai as its prime focus owing to its status of being the financial capital of India. Agencies, branches, and workplaces, outside India, that are held by Indian residents, also fall under the dominion of this act. Foreign Exchange Management Act (FEMA) also spreads to any disagreement that takes place in commercial spaces, agencies and branches outside India that are held by individuals covered by this act.

  3. Goals of Foreign Exchange Management Act (FEMA):

    4. Among the numerous objectives of the Foreign Exchange Management Act (FEMA), an imperative one is to look over and unite all the laws that are connected to foreign exchange. Moreover, FEMA intends to endorse foreign payments and import / export trade in the country. Another important goal of FEMA is to boost the orderly maintenance and development of the foreign exchange arcade in India.

  4. Implementation of Foreign Exchange Management Act (FEMA)

    5. There are many efforts being undertaken to make sure the effective and successful implementation of FEMA, 1999 in India. Right implementation measures and effectual supervision are significant preconditions for the achievement of the Foreign Exchange Management Act (FEMA).

    With ETTINTL’S expert guidance and consulting, individuals can better comply with FEMA 1999 in Mumbai. This comprises of all specific guidance on FEMA-applicable zones and export businesses within India as well as all branches, offices, and agencies located outside India which are right owned or controlled by a resident of India.