Can an Indian exporter hold a foreign currency account abroad for export proceeds?

An IT services company in Bengaluru bills a US customer and also imports software licences and hardware for its Indian office. Could it keep a dollar account in New York or in GIFT City, collect its export proceeds there, and pay its import bills from the same account? Since October 2025, RBI's rules say it can, within strict time limits.¹ This guide explains what the permission covers, how it differs from an EEFC account in India and from a platform's collection account, and what the deadlines are, as of October 2026.

What is a foreign currency account abroad for an Indian exporter?

A foreign currency account abroad for an Indian exporter is an account with a bank outside India, or in an International Financial Services Centre (IFSC), that receives the full export value and export advances under regulation 5(CA).¹ RBI's Master Direction on Deposits and Accounts restates the permission in paragraph 4.10:²

• Who: a person resident in India who is an exporter.
• What: a foreign currency account with a bank outside India.
• Credits: realisation of the full export value, and advance remittances received towards export of goods or services.
• Uses: paying for the exporter's imports into India, or repatriation into India.
• Time limit: within three months of receipt for accounts with banks in an IFSC, or by the end of the next month for all other jurisdictions, from the date of receipt and after adjusting for forward commitments.
• Condition: the realisation and repatriation requirements of the export regulations must also be met.

Who does the foreign currency account abroad permission suit?

The foreign currency account abroad permission applies to any resident exporter, and it mainly suits exporters who also import into India and want to pay those imports from the same foreign balance.¹²

See EEFC account benefits and local collection accounts for Indian exporters.

How do you use a foreign currency account abroad for export proceeds?

You use a foreign currency account abroad by agreeing the set-up with your Indian bank, tracking each receipt, and using or repatriating the money within the time limit.¹³

1. Talk to your Indian bank first: regulation 10 of the 2026 Regulations requires an exporter to route an advance and the related realisation through the same Indian Authorised Dealer bank, unless both banks are informed.³ Your Indian bank monitors your exports.
2. Open the account: with a bank outside India, or a bank in an IFSC.¹
3. Track receipts by date: the repatriation clock runs from the date each amount is received.¹
4. Use the funds only as permitted: imports into India, or repatriation.¹²
5. Keep the export trail: you still need the Export Declaration Form (EDF), and export value must be realised and repatriated within nine months from the invoice date for services, or twelve months if invoiced in rupees.³ See export realisation period.
6. Plan for tax disclosure: holding an account outside India can carry reporting obligations in your income-tax return. Confirm what applies with a chartered accountant.

How does a foreign currency account abroad compare with an EEFC account and a platform account?

A foreign currency account abroad sits outside India with short repatriation limits, while an EEFC account sits with an Indian bank and a platform account usually pays out rupees.¹²⁴

Wise, for example, says it converts each payment to INR and sends it to your Indian bank account, and that Indian users cannot hold the foreign currency or use the account details to send money.⁴ Platforms authorised as cross-border payment aggregators operate under RBI's payment aggregator directions, which, for example, cap each transaction at ₹25 lakh.⁵

What happens if you get a foreign currency account abroad wrong?

If you hold funds in a foreign currency account abroad beyond the time limit or use them for an unlisted purpose, you are outside the conditions of regulation 5(CA), which allow only imports into India or repatriation within three months (IFSC) or by the end of the next month.¹²

• Late repatriation: the clock runs from each receipt, so funds held past the date fall outside the permission.¹
• Unrealised export: the export realisation rules of the 2026 Regulations still apply alongside the account rules.³
• Split banking: an advance and its realisation go through the same Indian AD bank unless both banks are informed.³

Ask your bank or a chartered accountant what to do if a deadline is missed.

Which RBI rule allows a foreign currency account abroad?

The RBI rule that allows a foreign currency account abroad is regulation 5(CA) of the Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2015, as substituted by the Seventh Amendment Regulations, 2025 (Notification No. FEMA 10(R)(7)/2025-RB, 6 October 2025).¹

Before the Seventh Amendment, the time limit for these accounts was the end of the next month in every case, with no separate period for IFSC banks; the Master Direction's footnote to paragraph 4.10 records the earlier text.²

Note: Paragraph 4.10 of the Master Direction, as updated on 2 September 2026, still refers to the Foreign Exchange Management (Export of Goods and Services) Regulations, 2015.² From 1 October 2026 those were replaced by the FEMA (Export and Import of Goods and Services) Regulations, 2026, which set the realisation period for services at nine months from the invoice date.³ Ask your bank which text it applies until RBI updates the reference.

What are the common mistakes with a foreign currency account abroad?

The common mistakes with a foreign currency account abroad are treating it as a general spending account, counting the deadline from month-end instead of each receipt, and confusing it with a platform's collection details.¹⁴

• Spending abroad: the listed uses are imports into India and repatriation.¹²
• Wrong start date: the time limit runs from the date of receipt.¹
• Platform confusion: a platform's USD details usually collect on your behalf and pay out rupees.⁴
• Skipping the Indian bank: regulation 10 links advances and realisation to one Indian AD bank.³

For example, say a Bengaluru IT company receives $50,000 into an IFSC account on 10 March: it pays for its imports into India or repatriates the balance within three months of that date.¹

For the wider FEMA framework on exports, see FEMA rules for exports. Whether an account abroad or an EEFC account suits your business depends on your import needs, volumes and banking relationships, so take advice before opening one.