Trade Policy
FEMA Import Payment Deadline: Contract Rule | Trad
From 1 October 2026 the old 6-months-from-shipment benchmark for import payments is gone. Your deadline is the payment date agreed in the underlying contract — and if you cannot meet it, you need an AD bank extension for genuine reasons, not an automatic grace period.
The 6-month rule is gone — your contract sets the deadline
Under the old framework the benchmark was 6 months from shipment for import payments, with AD banks able to extend in tranches. From 1 October 2026, under FEMA 23(R)/2026-RB Regulation 9, that uniform clock is removed. Your AD bank monitors its IDPMS entries and follows up for payment within the period specified in the underlying contract — so the starting point is the payment date you agreed with your supplier, whether that is 30 days, 90 days, or 180 days.
General information, not legal advice
This is a practical guide to the FEMA 2026 import payment process, not legal advice. Your AD bank decides on your transaction, documents, and reasons. Confirm any transaction-specific position with your AD bank in writing before you act on it.
Old rule vs new rule
| Point | Old framework | FEMA 2026 (from 1 Oct 2026) |
|---|---|---|
| Deadline | Within 6 months from date of shipment | Within the period in the underlying contract |
| Extension | AD bank up to 6 months at a time, max 3 years | AD bank may extend if satisfied the reasons for delay are genuine |
| Monitoring | AD bank follow-up on shipment-based clock | AD bank monitors IDPMS entries against contract dates |
| Reduced settlement | Limited, documentation-heavy route | AD bank may close IDPMS entry settled at reduced value on genuineness |
| Small-value closure | Not available as self-declaration | Entries up to Rs 10 lakh per Bill of Entry or invoice closable on declaration |
No automatic grace period — ask for the extension
The most dangerous misunderstanding of the new rule is reading flexibility as leniency. A longer contract term is not a grace period, and missing the contract date without bank engagement is still a default. The regulation provides only one route: the AD bank may, on your request citing reasons for the delay, allow extension beyond the contract period if it is satisfied with those reasons.
- Spot the delay early — before the contract payment date passes.
- Write to your AD bank citing genuine reasons, transaction by transaction.
- Attach supporting evidence: supplier correspondence, shipping or production delays, quality disputes.
- Get the extension in writing and file it against the IDPMS entry.
- If reasons are thin or repeated without cause, expect the bank to demand process fixes first.
Evidence your terms before the transaction, not after
Because the deadline now lives in the contract, the contract paperwork carries compliance weight it did not used to. A purchase order accepted by the supplier together with the invoice can evidence the agreed payment terms — but only if the terms genuinely existed when the deal was struck.
Do not create payment terms retrospectively. Backdating or inventing extended terms after a delay has arisen will not survive the bank's genuineness check — and it turns a delay into a documentation problem.
- Signed contract or accepted purchase order stating the payment tenor
- Proforma and commercial invoice matching those terms
- LC or bank guarantee texts where the tenor runs through them
- Any agreed amendments, signed by both sides before the due date
Supplier credit and buyer credit still face trade-credit rules
The contract-led deadline does not free deferred-payment structures from cost discipline. Where supplier credit or buyer credit involves interest on delayed import payments, that interest must stay within the all-in-cost ceiling prescribed under the Borrowing and Lending Regulations. Structure the credit tenor and pricing with your AD bank before you commit to the supplier — not when the payment falls due.
The existing USD 200,000 cap on import advances is separately replaced by an AD-bank-determined threshold, beyond which a standby LC or bank guarantee may be required. Large upfront payments now hinge on your bank's own threshold and safeguards.
Paying less than invoiced: the reduced-settlement route
Where the commercial outcome is a short payment — a negotiated discount, a short-supply claim, or a quality settlement — the regulation gives your AD bank room to close the IDPMS entry where the import transaction has been settled at a reduced value, after being satisfied of the genuineness of the reasons cited.
- Supplier settlement evidence: discount agreement, claim settlement, or revised invoice
- Delivery records showing short supply, damage, or quality failure where relevant
- Bank approval confirming the bank is satisfied with genuineness
- Book entries reflecting the write-off or adjustment
- For entries up to Rs 10 lakh per Bill of Entry or invoice, the simplified self-declaration closure route
Check your contracts before the next payment falls due
Audit every live supplier contract for its stated payment tenor, align your cash-flow planning to those dates rather than any remembered 6-month habit, and open the extension conversation with your AD bank at the first sign of slippage. Importers who treat the contract date as the compliance date will find the new framework flexible; those who treat flexibility as freedom from dates will find IDPMS entries harder to close than ever.
Keep reading
Import deadline questions before your next payment?
Talk to trad — contract terms, extensions, and reduced settlements for importers.
Contact us →Cleaning up old EDPMS and IDPMS entries?
How the Rs 10 lakh self-declaration relief works for legacy entries.
Read the cleanup guide →Frequently asked questions
What is the import payment deadline under FEMA 2026?
Payment must be made within the period specified in the underlying contract between the importer and the overseas seller. The old uniform 6-months-from-shipment benchmark no longer applies. The rule comes from Regulation 9 of FEMA 23(R)/2026-RB, effective 1 October 2026, and your AD bank monitors compliance through IDPMS.
Is there an automatic grace period after the contract payment date?
No. There is no general automatic grace period. If you need more time, approach your AD bank with the reasons for the delay; the bank may grant an extension beyond the contract period if it is satisfied the reasons are genuine. Apply before the deadline where possible and keep the written approval.
What documents evidence the contract payment terms?
A purchase order accepted by the supplier together with the invoice can evidence the agreed payment terms. Agree and document the terms before or at the time of the transaction — do not create payment terms retrospectively after a delay has already arisen.
Can I pay less than the invoiced amount for an import?
Yes, a reduced-payment settlement is possible: your AD bank may close the IDPMS entry where the import transaction has been settled at a reduced value, once the bank is satisfied of the genuineness of the reasons. Keep the supplier settlement evidence (discount agreement, short-supply or quality claim records) plus the bank approval on file.
Do supplier-credit and buyer-credit structures still face trade-credit rules?
Yes. Deferred import payments structured as supplier credit or buyer credit still face trade-credit discipline: any interest payable on delayed import payments must stay within the all-in-cost ceiling prescribed under the Borrowing and Lending Regulations. Confirm the ceiling treatment with your AD bank before agreeing extended credit terms.
What happens if I simply leave an import payment outstanding?
Your AD bank monitors IDPMS entries and follows up for payment within the contract period. Unresolved entries flag you across the banking system and can complicate future remittances and advances. Communicate with your bank early — a commercial payment delay and a FEMA compliance extension are not the same thing.
Does the contract rule apply to import advances too?
Advances follow the contract as well: if the import does not materialise within the contract period or any extended period, the advance must be repatriated. If it is not, future advance import payments may be permitted only against an unconditional and irrevocable LC or bank guarantee. Check the advance position with your AD bank.