The shift from FERA to FEMA marked a move from foreign exchange *control* to *management*. Examine how recent RBI reporting reforms reflect this philosophy.

FEMA, 1999 replaced the control-oriented FERA, 1973 and came into force on 1 June 2000 [2]. Its stated purpose is "facilitating external trade and payments" and the orderly development of the forex market [1]. The RBI's 2025–26 reporting reforms largely follow this idea: they keep forex flows visible without blocking them. Some gaps in implementation remain.

Control to management: the shift

• FERA 1947 → 1973 gave the RBI wide powers over forex dealings. After 1991, liberalisation and current account convertibility led to its replacement by FEMA [2].
• Under Section 7 of FEMA, the RBI regulates export of goods and services through regulations and Master Directions. The aim is to make sure export earnings are realised and brought back to India, not to restrict trade [3].

How recent reforms reflect "management"

• Single rulebook: the FEM (Export and Import of Goods and Services) Regulations, 2026 came into force on 1 October 2026. They replace the 2015 framework [4].
• Compliance scaled to risk: banks can close EDPMS/IDPMS entries of ₹10 lakh or less per bill on the basis of the exporter's or importer's declaration. These declarations can be bundled into one quarterly filing [5]. This replaces document checks with trust.
• Consultation before rules: draft Directions were issued in July 2025. After feedback from stakeholders, the relief was extended to imports [5].
• Personal use left out: individuals' personal forex transactions, such as app or journal subscriptions, do not need reporting, whatever the amount [6].

Where the philosophy is still incomplete

• Clarity came after the rules: the rules took effect on 1 October [4]. The Governor gave his clarification only on 7 October, and the promised FAQs were still to come [6].
• The line between "personal" and "commercial" is unclear: freelancers and content creators are unsure whether their foreign earnings count as service exports [6].
• The relief is per bill: the ₹10 lakh limit applies to each bill [5], so paperwork still grows with the number of clients.

Overall, the reforms show the "management" approach through risk-based, consultative and data-driven oversight. To complete the shift, the RBI should publish FAQs with worked examples of "personal" receipts and tell banks not to collect extra documents from customers. Clear rules for ordinary users would serve FEMA's goal of facilitating trade and payments, and also India's MSME and gig-economy service exports.