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CS Executive · Economic, Commercial and Intellectual Property Laws · Law relating to Foreign Exchange Management

Anita Exports Ltd, resident in India, has foreign exchange due from a buyer in Germany. What does Section 8 of FEMA require of Anita Exports Ltd?

Anita Exports must take all reasonable steps to realise and repatriate the foreign exchange to India within the period and in the manner specified by the Reserve Bank. Section 8 imposes this duty on residents to whom foreign exchange is due or has accrued.

  1. ALeave the amount abroad indefinitely, as holding abroad is always permitted
  2. BTake all reasonable steps to realise and repatriate it within the period and in the manner specified by the Reserve BankCorrect
  3. CRepatriate it only if the Central Government issues a notice
  4. DConvert it into immovable property abroad

Explanation

Section 8 requires a person resident in India to whom foreign exchange is due or has accrued to take all reasonable steps to realise and repatriate it to India. The period and manner are those specified by the Reserve Bank. Leaving it abroad would breach this duty.

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