FOREIGN EXCHANGE

MANAGEMENT ACT
(FEMA)
INTRODUCTION :

• In 1999, the Foreign Exchange Management Act (FEMA) was introduce in

place of Foreign Exchange Regulation Act (FERA), 1973.
• FEMA came into effect from January 1,2000.
• The main objective of FERA was to regulate the business conducts of Indian
companies in overseas market & foreign companies in the Indian market.
• Thus, FEMA is an Act of “the Parliament of India”.
 Objectives of FEMA :

The core objectives of FEMA is –

• To facilitate the external trades & payments .

• To promote the systematic development of foreign exchange market in
India .
 Bodies of FEMA

RESERVE BANK OF INDIA: Frame Regulation

(Procedure)

DIRECTORATE OF ENFORCEMENT - Case

registered

MINISTRY OF FINANCE (CENTRAL

GOVERNMENT ) - Make Rules & Regulations ,
Guidelines
 FEMA APPLICABILITY

PERSON PERSON RESIDENT PERSON RESIDENT

IN INDIA OUTSIDE INDIA
Impact of FEMA on Indian Business

• Increased Foreign Investment in Business: FEMA controls certain parts of the

business of Indian companies in overseas markets and foreign companies in Indian market .
• Deals in Purchase and Sale of Foreign Exchange : FEMA has allowed Indian
companies to buy & sell foreign exchange and also to maintain balances at foreign
centers .
• Appointment of Foreign Business in India : FEMA allows non- residents, foreign
nationals and foreign companies to act as a agent in India. This has allowed Indian
companies to set up joint ventures with foreign companies.
THANK YOU
SUBMITTED BY : NISHIKA (CBSA212116)
VAIBHAV (CBSA212180)
ATINDER (CBSA212052)
SECTION : 1-C ( MBA)