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I. FEMA
1. RBI extends time for foreign exchange outlay in Merchanting Trade Transactions from four to six months
The Reserve Bank of India (RBI) has revised the guidelines relating to Merchanting Trade Transactions (MTT). On review, it has been decided to extend the permissible time period for outlay of foreign exchange from four months to six months. All other provisions of Circular dated January 23, 2020 remain unchanged.
[A.P. (DIR Series) Circular No. 11, dated 1st October 2025]
2. Amendment to Foreign Exchange Management (Debt Instruments) Regulations 2019
The RBI has amended the Debt Instruments regulations expanding and clarifying the scope of investment for persons resident outside India (PROI) holding rupee accounts under Deposit Regulations. Sub-para (E) of Para 1 of Schedule I has been amended, allowing them to purchase or sell dated Government securities, treasury bills, non-convertible debentures/bonds and commercial papers issued by Indian companies subject to conditions laid by RBI.
Further, Para 2(4A) of Schedule I has been replaced to specify that consideration for such purchases must be paid exclusively from the funds held in the investor’s rupee account mai
