The Foreign Exchange Management Act (FEMA) is a law to replace the draconian Foreign Exchange Regulation Act, 1973. Any offense under FERA was a criminal offense liable to imprisonment, whereas FEMA seeks to make offenses relating to foreign exchange civil offenses. Unlike other laws where everything is permitted unless specifically prohibited, under FERA nothing was permitted unless specifically permitted. Hence the tenor and tone of the Act was very drastic. It provided for imprisonment of even a very minor offense. Under FERA, a person was presumed guilty unless he proved himself innocent whereas under other laws, a person is presumed innocent unless he is proven guilty.
With liberalization, a need was felt to remove the drastic measures of FERA and replace them by a set of liberal foreign exchange management regulations. Therefore FEMA was enacted to replace FERA.
FEMA extends to the whole of India. It applies to all branches, offices and agencies outside India owned or controlled by a person resident in India and also to any contravention there under committed outside India by any person to whom this Act applies.
With liberalization, a need was felt to remove the drastic measures of FERA and replace them by a set of liberal foreign exchange management regulations. Therefore FEMA was enacted to replace FERA.
FEMA extends to the whole of India. It applies to all branches, offices and agencies outside India owned or controlled by a person resident in India and also to any contravention there under committed outside India by any person to whom this Act applies.
What is the Foreign Exchange Management Act (FEMA)?
![What is the Foreign Exchange Management Act (FEMA)?]()
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