Thursday, 5 March 2020

Foreign Exchange Management


Foreign Exchange Management

FERA is an Act to consolidate and amend the law regulating certain payments, dealings in
foreign exchange and securities, transactions indirectly affecting foreign exchange and the
import and export of currency, for the conservation of the foreign exchange resources of
the country and the proper utilisation thereof in the interests of the economic development
of the country.
Notes The Foreign Exchange Management Act (FEMA), 1999, has been enacted as part of the
ongoing liberalisation process.
The object of the FEMA Bill is to consolidate and amend the law relating to foreign
exchange, with the objective of facilitating external trade and payment and for promoting
the orderly development and maintenance of the foreign exchange market in India.
Regulations relating to the export of goods and services from India are contained in the
Foreign Exchange Management (Export of Goods and Services) Regulations 2000.
If any person contravenes any provision of the FEMA, he shall be liable for a penalty upto
thrice the sum involved in such contravention where such amount is quantifiable, or up to
two lakhs rupees where the amount is not quantifiable, and where such contravention is
a continuing one.

Contact Manufacturing: A company takes up manufacturing work for another company on
contractual basis
Current Account Transactions: Transaction other than a capital account transaction
Fema: Foreign Exchange Management
Fera: Foreign Exchange Regulation Act
Strategic Alliance: Two or more companies come together for common purpose

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