What do sections 7 and 8 of FEMA mean for service exporters?

Most of what an Indian service exporter has to do under foreign exchange law traces back to two short provisions of the Foreign Exchange Management Act, 1999 (FEMA): section 7 on declaring exports and section 8 on bringing the money home.¹ The detail, such as which form, which deadline and how many months, sits in regulations made by the Reserve Bank of India (RBI).

This guide reads the two sections as they stand on India Code, then shows how RBI applies them to designers, developers, consultants, tutors and agencies from 1 October 2026.¹²

What do sections 7 and 8 of FEMA say?

Sections 7 and 8 of FEMA say that an exporter must declare exports and that a person resident in India must realise and repatriate foreign exchange due.¹ Sub-sections (1) and (2) of section 7 deal with goods: a goods exporter declares the full export value and gives RBI information needed to ensure realisation.¹ Sub-section (3) is the one that applies to services:¹

"Every exporter of services shall furnish to the Reserve Bank or to such other authorities a declaration in such form and in such manner as may be specified, containing the true and correct material particulars in relation to payment for such services."

Section 7(3) does not set a form or deadline itself. Those are "specified" by RBI regulations, made under section 47 of the Act.¹

Section 8 says that where any foreign exchange "is due or has accrued" to a person resident in India, that person "shall take all reasonable steps to realise and repatriate to India such foreign exchange within such period and in such manner as may be specified by the Reserve Bank".¹ Three phrases matter for service exporters:

• "Person resident in India": defined in section 2(v). It includes an individual who resided in India for more than 182 days in the preceding financial year (with exceptions), and any person or body corporate registered or incorporated in India.¹
• "All reasonable steps": the duty is to make genuine efforts to collect each payment.¹
• "Period and manner specified by the Reserve Bank": the deadline lives in RBI's regulations.¹

Who do sections 7 and 8 of FEMA apply to?

Sections 7 and 8 of FEMA apply to every exporter of services and every person resident in India with foreign exchange due, including individuals and companies.¹

How do you comply with sections 7 and 8 of FEMA?

You comply with sections 7 and 8 of FEMA from 1 October 2026 by building three habits: declare, collect and route through a bank.¹²

1. Declare: file the EDF for each month's invoices with your bank (or STPI or SEZ authority).²
2. Collect: take reasonable steps to receive the full invoice value within nine months, or ask your bank for an extension or reduction before the deadline passes.¹²
3. Route through a bank: receive payment through an authorised bank or other authorised person, in a manner RBI permits.¹

For the filing mechanics, see the EDF guide for service exporters.

What deadlines apply under sections 7 and 8 of FEMA?

The deadlines under sections 7 and 8 of FEMA are set by RBI: an EDF within 30 days from the end of the invoice month, and realisation within nine months of the invoice date.²³

The amendment of 22 September 2026 replaced the "fifteen months" and "eighteen months" originally written into the January 2026 notification, before the regulations took effect.³ The AD bank can extend the period on a request with reasons (regulation 5), allow a reduced export value (regulation 6), and allow set-off against import payables (regulation 7).² The full history and examples are in the export realisation period guide.

What happens if a service exporter breaches section 7 or 8 of FEMA?

If a service exporter breaches section 7 or 8 of FEMA, the breach is a civil contravention under section 13(1).¹ After adjudication, the penalty can be up to three times the sum involved where the amount is quantifiable, or up to ₹2 lakh where it is not, and up to ₹5,000 for every day a contravention continues after the first.¹

• Regulation 13: if proceeds stay unrealised for more than one year after the due date (or extended date), the exporter may export further only against full advance payment or an irrevocable letter of credit.²
• Caution list: exporters already on RBI's caution list on 30 September 2026 remain bound by the earlier order until removed.²³
• Compounding: section 15 lets a person apply to compound a contravention under section 13; the compounding authority (officers of the Directorate of Enforcement, or RBI officers authorised by the Central Government) must dispose of the application within 180 days from receipt, and once compounded, no further proceedings continue for that contravention.¹ See FEMA compounding for exporters.

Which RBI regulations apply sections 7 and 8 of FEMA?

The FEMA (Export and Import of Goods and Services) Regulations, 2026 (the 2026 Regulations) apply sections 7 and 8 from 1 October 2026, replacing the 2015 rules, and cite sections 7, 8, 10(6) and 47(2) of FEMA as their legal basis.² Until 30 September 2026, regulation 3(3) of the FEMA (Export of Goods & Services) Regulations, 2015 said that where none of the prescribed forms applied to a service, the exporter could export it without any declaration, but still had to realise and repatriate the money.⁴ In practice only software exporters filed a form (SOFTEX).

The table above is drawn from regulation 3 of each set of regulations and the definitions in regulation 2 of the 2026 Regulations.²⁴

How do sections 3 and 10 of FEMA connect to sections 7 and 8?

Sections 3 and 10 of FEMA explain why the money has to pass through a bank.¹

• Section 3(c): no person shall receive, otherwise than through an authorised person, any payment by order or on behalf of a person resident outside India, except as the Act, rules or regulations allow.¹
• Section 10(1) and 10(5): RBI can authorise banks and others as "authorised persons", and an authorised person must obtain declarations and information from a customer before handling a foreign exchange transaction, and refuse it in writing if the customer does not comply.¹
• Circular No. 20: RBI's A.P. (DIR Series) Circular No. 20 dated 16 January 2026, issued under sections 10(4) and 11(1), directs authorised dealers to follow FEMA, the regulations and the Foreign Trade Policy when handling export and import transactions, and to inform the Directorate of Enforcement of doubtful transactions.⁵

That is the legal reason your bank asks for invoices, contracts or a purpose code.

What are the common mistakes with FEMA sections 7 and 8?

The common mistakes with FEMA sections 7 and 8 are assuming non-software services still need no declaration and looking for the deadline in the Act.¹²⁴

• No declaration: from 1 October 2026, every service exporter files an EDF.²
• Looking in the Act for the period: section 8 leaves the period to RBI.¹
• Quoting fifteen months: the amendment of 22 September 2026 changed it to nine before the regulations took effect.³
• Bypassing the bank: section 3(c) requires payment through an authorised person.¹

Whether a particular arrangement, such as a platform balance held abroad, meets these rules depends on the facts and on RBI's directions to banks, so confirm unusual cases with your AD bank or a chartered accountant. For the broader framework, see FEMA rules for service exports.