Foreign Exchange India

Guidelines on travel related matters - Foreign Exchange (Source Reserve Bank of India) As on July 1, 2004

1. From where one can buy foreign exchange?

Foreign exchange can be purchased from any authorized dealer. Besides authorized dealers, full-fledged money changers are also permitted to release exchange for business and private visits.

2. Who is an authorized dealer?

An authorized dealer is normally a bank specifically authorized by the Reserve Bank under Section 10(1) of FEMA,1999, to deal in foreign exchange or foreign securities.

3. How much exchange is available for a business trip?


Authorized dealers can release foreign exchange up
to USD 25,000 for a business trip to any country other than Nepal and Bhutan. Release of foreign exchange exceeding USD 25,000 for a travel abroad (other than Nepal and Bhutan) for business purposes, irrespective of period of stay, requires prior permission from Reserve Bank. Visits in connection with attending of an international conference, seminar, specialized training, study tour, apprentice training, etc., are treated as business visits. Visit abroad for medical treatment and/or check up also falls within this category.

4. Can one obtain additional foreign exchange for medical treatment outside India?

Authorized dealers may release foreign exchange up to USD 100,000 or its equivalent to resident Indians for medical treatment abroad on self declaration basis of essential details, without insisting on any estimate from a hospital/doctor in India/abroad. A person visiting abroad for medical treatment can obtain foreign exchange exceeding the above limit, provided the request is supported by an estimate from a hospital/doctor in India/abroad. This exchange is to meet the expenses involved in treatment and in addition to the amount referred to in paragraph 1 above.

5. How much exchange is available for studies outside India?

Students going abroad for studies are treated as Non-Resident Indians (NRIs) and are eligible for all the facilities available to NRIs under FEMA.

In addition, they can receive remittances up to USD 100,000 from close relatives from India on self-declaration, towards maintenance, which could include remittances towards their studies also.

Educational and other loans availed of by students as resident in India can be allowed to continue. There is no dilution in the existing remittance facilities to students in regard to their academic pursuits.

6. How much foreign exchange can one buy when going for tourism to a country outside India?

In connection with private visits abroad, viz., for tourism purposes, etc., foreign exchange up to USD10,000, in any one calendar year may be obtained from an authorized dealer. The ceiling of USD10,000 is applicable in aggregate and foreign exchange may be obtained for one or more than one visit provided the aggregate foreign exchange availed of in one calendar year does not exceed the prescribed ceiling of US$10,000 {The facility was earlier called B.T.Q or F.T.S.}. This limit of USD10,000 can be availed of by a person along with foreign exchange for travel abroad for any purpose, including for employment or immigration or studies. However, no foreign exchange is available for visit to Nepal and/or Bhutan for any purpose.

7. How much foreign exchange is available to a person going abroad on employment?

Person going abroad for employment can draw foreign exchange up to USD100,000 from any authorized dealer in India on the basis of self-declaration.

8. How much foreign exchange is available to a person going abroad on
emigration?

Person going abroad on emigration can draw foreign exchange up to USD100,000 on self- declaration basis from an authorized dealer in India. This amount is only to meet the incidental expenses in the country of emigration. No amount of foreign exchange can be remitted outside India to become eligible or for earning points or credits for immigration. All such remittances require prior permission of the Reserve Bank.

9. Is there any purpose for which going abroad requires prior approval from the Reserve Bank or Govt. of India?

Dance troupes, artistes, etc., who wish to undertake cultural tours abroad, should obtain prior approval from the Ministry of Human Resources Development, Government of India, New Delhi.

10. How much foreign exchange can be purchased in foreign currency notes while buying exchange for travel abroad?

Travelers are allowed to purchase foreign currency notes/coins only up to USD 2000. Balance amount can be taken in the form of traveler's cheques or banker’s draft. Exceptions to this are (a) travelers proceeding to Iraq and Libya can draw foreign exchange in the form of foreign currency notes and coins not exceeding US$ 5000 or its equivalent; (b) travelers proceeding to the Islamic Republic of Iran, Russian Federation and other Republics of Commonwealth of Independent States can draw entire foreign exchange released in form of foreign currency notes or coins. Continued on page two >>>

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Foreign Currency Exchange - India

Foreign exchange transactions in India have become more liberalized with the Foreign Exchange Management Act, 1999 (FEMA) which came into operation as of 1st June 2000. 

Foreign exchange dealers in India today have been given powers of making all types of remittances in foreign exchange subject to present rules.

The previous requirements of seeking Reserve Bank of India permission has been eliminated for most transactions.

I remember leaving India in 1970 when I was allowed to purchase only 8 dollars in foreign exchange for my travel abroad. Things have indeed changed today in India as far as foreign currency transactions are concerned.

Here are some of the significant provisions from FEMA

APPLICATION FOR REMITTANCES IN FOREIGN CURRENCY

Foreign currency may be sold against Indian Rupees held by persons who are not resident of India but are passing through or leaving India after a visit, at the time of their departure from India.

For this purpose, a Bank or Encashment certificate issued by an Authorized Dealer, Exchange bureau or Authorized Money changer in form BCI, ECF OR ECR, is required to show that the rupee had been acquired by sale of foreign Exchange to an Authorized Dealer or money changer in India.

Such a certificate is valid for such reconversion i.e. a period of three months is not over from the date of sale of the foreign currency by the traveler.

RATES OF EXCHANGE

Authorized dealers and their Exchange bureau may buy from and sell to public foreign currency notes and coins at rates of exchange determined by market conditions. Dealings in foreign currency notes and coins between authorized dealers and between authorized dealers and money changers would also be at rates determined by market conditions.

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