The current import payment control starts with the contract
For imports governed by the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, effective 1 October 2026, Regulation 9 directs the Authorised Dealer to monitor IDPMS entries and follow up for payment within the period specified in the underlying contract. An extension beyond that period may be allowed by the AD on a reasoned importer request if the AD is satisfied. A request, an unpaid ledger balance or a unilateral revised due date is not evidence that an extension has been granted.
Use the RBI’s current Regulations, amended up to 22 September 2026 together with A.P. (DIR Series) Circular 20 dated 16 January 2026, whose directions also took effect on 1 October 2026. This article addresses ordinary import-payment monitoring under Regulation 9. Merchanting trade, failed import advances, trade-credit financing conditions and other special transactions require their separate applicable rules.
Translate the payment clause into a dated obligation
A contract may measure payment from invoice, shipment, delivery, acceptance or a specified milestone. Capture the actual clause and its starting event before calculating the deadline. An invoice dated later than shipment does not change a shipment-based term. An internal vendor-master default cannot override the signed commercial agreement. Where a purchase order, master agreement and amendment conflict, resolve the operative term and document the conclusion with the bank as necessary.
For a milestone contract, maintain amounts and dates separately. Distinguish an advance, a shipment instalment, retention and final acceptance payment rather than ageing the entire contract from one date. Establish objective evidence of acceptance when it starts a payment period. Avoid using undocumented non-acceptance simply to keep overdue liabilities out of the exception report.
| Register field | What to record | Why it matters |
|---|---|---|
| Contractual payment basis | Exact term, starting event, currency and instalment | The legal clock can differ from invoice ageing |
| Current permitted date | Original due date and any AD-allowed extension | A pending application does not establish a new deadline |
| Settlement and IDPMS linkage | Remittance allocation, adjustments and bank status | Partial payment normally leaves a residual open item |
AD extension is a documented decision
The proviso to Regulation 9 permits an importer to request an extension citing reasons for delay. Assemble the operative contract, event dates, outstanding amount, reason, proposed payment plan and supporting correspondence. Retain the AD’s decision and scope: which entries, amount and extended date it covers. Do not describe an application acknowledgement as an approval.
Regulation 19 requires the AD to maintain a documented policy and SOP covering processes including import-payment extensions, documents, timelines and internal approvals. Check that bank’s disclosed process rather than promising that every bank uses a particular online form or turnaround. A commercial extension agreed with the supplier and an AD’s permitted extension address related but different records; reconcile both.
Payment evidence and IDPMS closure are connected
Under Regulation 4(2), the AD must satisfy itself about transaction genuineness and simultaneously close or update the relevant EDPMS/IDPMS entry when crediting or debiting the customer’s account. Regulation 18 requires monitoring of outstanding entries and follow-up for documents. Regulation 18(1)(h) addresses import mark-off after payment has been made. A bank remittance reference should therefore be mapped to the underlying Bill of Entry or service invoice and remaining obligation.
Where one remittance settles several invoices, prepare an allocation schedule in the original currency. Where several remittances settle one invoice, retain the running residual. Reconcile bank charges, currency conversion and supplier credits without assuming they all reduce the contractual principal. A bank debit alone does not identify which import entry has been fully settled.
Regulation 18(1)(k) allows the AD, on importer request, to close an IDPMS entry settled at reduced value after satisfying itself about the genuineness of the reasons. Preserve the agreed reduction and settlement evidence. A supplier credit note should not be mislabelled as a time extension, and a debit to an expense account should not be assumed to establish bank closure.
Contract-based monitoring does not displace other conditions
Regulation 10(4) links interest on delayed import payments to the applicable all-in-cost ceiling for trade credit under the Foreign Exchange Management (Borrowing and Lending) Regulations, 2018, as amended. The current contract-monitoring rule does not authorise an arbitrary interest rate or override a separately applicable financing, import-policy or other legal restriction. Check the actual facility and current ceiling before calculating interest; no universal interest rate is assumed here.
For an advance and subsequent payments, Regulation 10(2) provides the same-AD routing rule, with a change possible when the importer intimates both ADs. Ensure that records follow the transaction when banks change. This article does not apply Regulation 9 as a replacement for Regulation 12’s separate failed-advance requirements or Regulation 16’s merchanting-trade timeline.
Treat the October transition as a legal cut-off, not an ageing reset
The new directions superseded the identified earlier master directions from their effective date. Regulation 20 also addresses AD handling of pre-1 October 2026 transactions that previously required RBI approval. That delegation is not a statement that every old overdue import automatically receives a new payment date. Tag older items separately, establish their applicable law and bank treatment, and avoid resetting the entire opening payable ledger to 1 October.
For new in-scope imports, build an ageing report by contractual due date and approved extended date, with a separate IDPMS status column. It should show current, approaching due, overdue with an extension pending, and overdue without an established extension. These are management-control descriptions, not additional statutory categories. The report becomes useful when procurement supplies the contract and operations supplies the starting-event evidence before finance schedules payment.
Worked illustrations
These illustrations use fictional facts and expressly stated assumptions. Amounts are Indian rupees unless a different currency or unit is specified. They are independent examples, not findings about any actual client.
Illustrative example 1: Sixty days from invoice
A new in-scope import has shipment on 1 November 2026 and invoice on 5 November 2026. The contract expressly requires payment sixty days after invoice. Adding sixty calendar days to 5 November gives 4 January 2027. Using shipment would give a different date and would not follow this clause. These examples assume calendar-day terms and no contractual holiday adjustment.
Illustrative example 2: Thirty days from receipt
The agreement instead requires payment thirty days after goods receipt. Receipt occurs on 15 November 2026, supported by delivery evidence. The calculated date is 15 December 2026. An accounts entry posted on 20 November cannot move it to 20 December; that would introduce an unsupported five-day delay.
Illustrative example 3: Keep milestone balances separate
A USD 100,000 contract requires 20% advance, 50% on shipment and 30% on acceptance. Amounts are USD 20,000, USD 50,000 and USD 30,000. Assume advance paid on 20 October 2026, shipment on 1 November, acceptance on 1 December, and only USD 40,000 paid against shipment. Shipment residual is USD 10,000 and the acceptance instalment is USD 30,000: total unpaid USD 40,000, with separate contractual due events.
Illustrative example 4: One hundred twenty days from shipment
Shipment occurs on 10 November 2026 and the invoice is dated 11 November. The operative clause specifies 120 days after shipment. The due date is 10 March 2027. This follows the agreed 120-day term; it is not calculated by adding a generic six-month period or by silently shifting the start to invoice date.
Illustrative example 5: Granted extension versus pending request
Original contractual payment date is 15 December 2026. Assume the AD has expressly allowed payment until 15 February 2027 for the identified item. The interval between those dates is 62 days. Retain both the original and extended dates. A different item with only a pending extension request cannot automatically be assigned the same 62-day allowance.
Illustrative example 6: Several remittances against two invoices
Invoice A is USD 60,000 and invoice B USD 20,000: total USD 80,000. Remittance one of USD 40,000 is allocated to A, leaving USD 40,000 overall. Remittance two of USD 25,000 settles A’s remaining USD 20,000 and USD 5,000 of B, leaving USD 15,000. Remittance three of USD 15,000 settles B. Only after documented allocation and the bank’s applicable processing should the relevant fully settled entries be treated as closed.
Illustrative example 7: A genuine change in settlement value
Assume the documented original invoice is USD 100,000, an agreed variation adds USD 5,000 and a genuine supplier credit reduces it by USD 10,000. Revised obligation is USD 95,000. Payments of USD 60,000 leave USD 35,000. Provide the variation, credit and settlement evidence to the AD; the USD 5,000 net reduction does not itself extend the payment deadline or prove IDPMS closure.
Ten-step verification table
| Step | Verification | Evidence to retain |
|---|---|---|
| 1 | Identify the transaction cohort and governing regime | Import date, agreement and pre/post-1 October 2026 analysis |
| 2 | Confirm transaction type and separate special rules | Ordinary import, advance, financing or merchanting classification |
| 3 | Obtain the operative payment clause | Signed contract, purchase order and effective amendments |
| 4 | Evidence the event that starts each term | Invoice, shipment, delivery or acceptance documents |
| 5 | Calculate each instalment and contractual due date | Currency-wise milestone and calendar working |
| 6 | Investigate any likely delay before the date | Reasoned request, cash plan and supplier correspondence |
| 7 | Record the actual AD extension decision | Written scope, conditions, identified entry and permitted date |
| 8 | Allocate every remittance and adjustment | Bank references, invoice allocation and residual schedule |
| 9 | Reconcile bank/IDPMS status to the remaining obligation | Bills of Entry or service invoices, bank confirmations and status reports |
| 10 | Escalate unresolved items and additional legal conditions | Overdue report, AD correspondence and interest/financing review |
Sixteen practitioner FAQs
1. What is the commencement date of the new framework?
The Regulations and corresponding RBI directions took effect on 1 October 2026.
2. Does Regulation 9 use a single universal import-payment period?
It directs AD monitoring and follow-up by the period specified in the underlying contract. Read the actual contract and other applicable restrictions.
3. Which date starts a sixty-day term?
The contract determines the event: invoice, shipment, receipt or another specified event. The number alone does not establish the start.
4. Can vendor-master terms replace a signed contract?
No. They are internal data. Resolve any inconsistency against the operative commercial documents and applicable law.
5. How should milestone contracts be monitored?
Record each instalment’s amount, trigger and due date separately, retaining evidence that the event occurred.
6. Can the AD allow an extension?
Regulation 9 permits it on an importer’s request citing reasons, where the AD is satisfied. It is not automatic.
7. Is an application acknowledgement sufficient proof of extension?
No. Retain the decision and its scope, date and conditions; an acknowledgement only proves submission.
8. Does a supplier-agreed extension settle every FEMA question?
Reconcile the commercial amendment with the AD’s required treatment. Do not assume the supplier’s consent is itself the AD’s decision.
9. Where should the importer find the bank process?
Regulation 19 addresses the AD’s policy and SOP. Consult the bank’s disclosed process and responsible branch rather than assuming a universal portal form.
10. Does a partial remittance close the full import entry?
Only the settled portion is supported by that remittance. Preserve allocations and residuals and reconcile the AD’s update or closure.
11. Can one remittance cover several invoices?
Prepare an explicit invoice allocation in the relevant currency and provide the necessary supporting documents to the AD.
12. What if settlement occurs at a reduced value?
Regulation 18(1)(k) permits AD closure on a reasoned importer request after the AD is satisfied about genuineness. Keep the agreed reduction and payment evidence.
13. Can delayed-payment interest be whatever the contract states?
Regulation 10(4) also imposes the applicable trade-credit all-in-cost ceiling. Verify the current financing framework before calculating or remitting interest.
14. Can the importer change AD after an advance?
Regulation 10(2) permits routing through another AD where the importer intimates the change to both ADs. Keep continuity of the underlying transaction records.
15. Do old outstanding imports all restart on 1 October?
No automatic reset is stated. Separate older transactions and examine the applicable law and Regulation 20’s handling provision.
16. Can these dates be used for merchanting trade?
No. Merchanting trade has a separate Regulation 16 framework. Ordinary import contract monitoring should not be substituted for it.
Conclusion
Anchor each import payable to its operative contractual event and due date. Preserve AD extension decisions, allocate settlements and verify the bank’s IDPMS treatment without assuming that commercial bookkeeping alone closes the compliance item.