Foreign Exchange Management Act (FEMA)

  • 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).

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