- The Foreign Exchange Management Act (FEMA) was passed by Parliament in 1999.
- It had replaced FERA (Foreign Exchange Regulations Act), 1973 which had become incompatible after economic reforms and pro-liberalization policies of government.
- It aims at facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India.
- It makes offenses related to foreign exchange civil offenses.
- It enables new foreign exchange management regime consistent with emerging framework of World Trade Organisation (WTO).