Master Direction – Export of Goods and Services (Updated as on July 17, 2026)
UR
- Applies toAll regulated entities
- StatusIn force
- IssuedJan 04, 2016
- Amendmentsnone tracked
- Length52 points in 4 sections · 6 min read
The four dates on this rule
- PublishedJan 04, 2016The day RBI put this document out. This is the same day as the Issued date on this rule.
- Starts to applyNot statedNot stated separately in this document. Read the rule itself before you assume a start date.
- Time to get readyNot statedCannot be worked out until the day it starts to apply is known.
- Last date to actNot statedNo date to act by was found in this document. Other dates may sit inside single paragraphs.
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49 of the 52 points name no product and bind every product. All products.
Numbers to remember
| nine months | An exporter must bring the full export value to India within nine months of the date of export. RBI Para A.2 |
| fifteen months | Goods sent to a warehouse outside India must be paid for within fifteen months of shipment. RBI Para A.2 |
| 2 per cent | Free-of-cost promotional exports are capped at 2 per cent of average annual export realisation. RBI Para C.1 |
| one crore rupees | The gems and jewellery sectors get an annual free-export cap of one crore rupees or 2 per cent. RBI Para C.1 |
| three years | An exporter who takes advance payment must ship the goods within three years of receiving the money. RBI Para C.2 |
| 21 day | Shipping documents arriving after the 21 day deadline may still be handled if the bank accepts the reason. RBI Para C.7 |
| 10 per cent | Up to 10 per cent of the export value may stay undrawn for weight or quality adjustments. RBI Para C.11 |
| 5 per cent | A foreign warehouse is allowed only if overdue exports stay under 5 per cent of last year's exports. RBI Para C.13 |
| 25 per cent | After default, goods may go to a new buyer without RBI approval if any price cut stays within 25 per cent. RBI Para C.18 |
| six months | Banks may extend the realisation period themselves, six months at a time, whatever the invoice value. RBI Para C.20 |
| one year | Extensions beyond one year need total overdue exports within one million United States dollars. RBI Para C.20 |
What it says
How firm is each point
Stated by RBI — RBI’s own paragraph says this. We have only made it plainer.
Our reading — BankPulse read RBI’s paragraph and shortened it. The paragraph is the authority, not this line.
Needs judgement — RBI leaves this to the bank to settle, so nobody can give you a fixed number here.
Can be read two ways
A point marked this way sits on an RBI paragraph that can honestly be read two ways. Our own sentence takes one of the two. BankPulse does not choose for you: read RBI’s own paragraph, at the number printed on the point, before you act on it.
Two ways — firm, or the usual course. RBI’s paragraph softens the duty with a hedging word instead of stating it flat. One reading: It is a firm rule, and only a rare case RBI would accept sits outside it. The other: It is the usual course, and a bank may depart from it for its own recorded reasons.
Must know
1. Nine months to repatriate
An exporter must bring the full export value to India within nine months of the date of export.
BankPulse example. Goods leave India on 10 January. The full export value must reach India within nine months of that date. So the money is due by 10 October.
2. Warehouse exports get longer
Goods sent to a warehouse outside India must be paid for within fifteen months of shipment.
3. Free samples have a cap
Free-of-cost promotional exports are capped at 2 per cent of average annual export realisation.
4. A crore for jewellers
The gems and jewellery sectors get an annual free-export cap of one crore rupees or 2 per cent.
5. Advance means a deadline
An exporter who takes advance payment must ship the goods within three years of receiving the money.
6. Interest on advances capped
Interest paid on an export advance may not exceed the reference rate plus 100 basis points.
7. Late refunds need RBI
After three years, refunding an unused advance needs the Reserve Bank's prior approval.
8. Papers within 21 days
Shipping documents arriving after the 21 day deadline may still be handled if the bank accepts the reason.
9. A tenth may wait
Up to 10 per cent of the export value may stay undrawn for weight or quality adjustments.
10. A warehouse abroad has doors
A foreign warehouse is allowed only if overdue exports stay under 5 per cent of last year's exports.
11. Unreported delay goes to RBI
If proceeds stay unrealised and no extension is sought, the bank reports to RBI's regional office.
12. Buyer can change
After default, goods may go to a new buyer without RBI approval if any price cut stays within 25 per cent.
13. Six months at a time
Banks may extend the realisation period themselves, six months at a time, whatever the invoice value.
14. A million dollar door
Extensions beyond one year need total overdue exports within one million United States dollars.
15. Writing off small losses
An ordinary exporter may self write off unrealised bills up to 5 per cent of last year's realised exports.
16. Status holders get double
A status holder exporter may self write off up to 10 per cent; a bank may also write off 10 per cent.
17. One year old first
A bill can be written off only after staying unpaid for more than one year despite best efforts.
18. A six month relationship
The exporter must be the bank's regular customer for at least six months and fully meet KYC rules.
Do it
1. Small invoices count too
The bulk statement must list every invoice, including those under 25,000 United States dollars.
2. Third party declared
Export money realised through a third party must be declared on the proper declaration form.
3. Short shipment notice
If part of a declared shipment is short-shipped, the exporter must notify customs in the prescribed form.
4. Overdue bills chased
Banks must watch every bill and take up overdue ones with the exporter promptly.
5. Incentives go back
An exporter writing off a bill must surrender the export incentives received on it.
6. Beyond the exporter's control
The bank must be satisfied the delay was for reasons beyond the exporter's control.
7. Paid as realised
Banks must update the export monitoring system as and when money is actually realised.
8. Commission declared upfront
The commission should be declared on the export declaration form and accepted by customs.
Background
1. Who runs export trade
Export trade is regulated by the Directorate General of Foreign Trade; banks handle the money side under RBI's rules.
2. Banks follow the policy
Authorised dealer banks handle export deals in line with the Foreign Trade Policy and RBI's directions.
3. Same clock for everyone
The same clock covers special economic zones, status holders and export oriented units.
4. Customs certifies the form
At a manual port, customs certifies the declared value and numbers both copies of the export declaration form.
5. Original goes to RBI
Customs keeps the original declaration for the Reserve Bank and returns the duplicate to the exporter.
6. Software in bulk
Software exporters may file single or bulk SOFTEX statements in spreadsheet form for certification.
7. Auditors spot-check
Internal auditors spot check the duplicate forms to confirm any shortfall stayed within the bank's powers.
8. Advances tracked centrally
Banks report every incoming export payment, advances included, into the tracking system.
9. Documents stay with the bank
The bank keeps submitted export papers; they go back only to fix errors and return.
10. Direct dispatch is the exception
Documents may go straight to the buyer only with full advance payment or an irrevocable letter of credit.
11. Consignment needs a trust receipt
Consignment documents are delivered only against an undertaking to pay by a set date.
12. Trust receipt for part bills
The trust receipt routine applies even when a part bill is drawn in advance by trade practice.
13. Expenses off the top
Consignment agents may deduct their normally incurred expenses from the sale proceeds.
14. A turnover threshold
The warehouse applicant needs a minimum export turnover of 100,000 United States dollars in the last financial year.
15. Forms held till paid
The bank keeps the duplicate export forms until the full proceeds are realised.
16. No extension under investigation
No bank extension is allowed while the deal is under investigation by the agencies.
17. A promise to realise
For an extension, the exporter declares the proceeds will be realised during the extended period.
18. Proof of a dead debt
Write-off needs proof, such as the buyer's insolvency and a liquidator's certificate of no recovery.
19. Set-off with the same buyer
Export dues may be set off against import dues to the same overseas buyer or supplier.
20. Group settlement allowed
Set-off can also run with overseas group companies through a centralised settlement arrangement.
21. The caution list
RBI caution-lists an exporter on the bank's recommendation, based on track record and investigations.
22. Grounds for the list
The list is for exporters under agency investigation, those untraceable, or those not truly chasing their dues.
23. Leaving the caution list
The bank also recommends removal from the caution list to RBI's regional office.
24. Digital since 2017
Since 16 October 2017, banks issue these certificates only from the system's own data.
25. Realisation certificates go digital
Banks issue the money-received certificate only from data held in the tracking system.
26. Commission needs a paper trail
Agency commission may be paid by remittance or deduction, on the exporter's application.