FEMA Bulletin: July - August 2026

Key highlights

• Draft Foreign Exchange Management (Foreign Investment) Rules, 2026, with a principle-based, equity-focused framework, has been proposed to replace the Non-Debt Instruments Rules, 2019.
• Foreign-Owned or Controlled Company (FOCC) concept has been replaced by the Foreign-Controlled Entity (FCE) framework, with a 10% voting-rights threshold codified in the definition of "control".
• Inventory-based e-commerce will be permitted exclusively for the export of goods manufactured and/or produced in India.
• The Draft Rules will take effect only upon publication in the Official Gazette, and the e-commerce relaxation only from the date of the corresponding FEMA notification. Both, therefore, warrant close monitoring.

FEMA Bulletin: July - August 2026

Volume 2 of the FEMA Bulletin covers the developments of July–August 2026 and their practical implications for businesses undertaking cross-border transactions.

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