---
title: "Foreign Exchange Management Act, 1999 (FEMA)"
description: "The Foreign Exchange Management Act, 1999 regulates foreign exchange transactions in India, crucial for UPSC GS3 external sector exam preparation."
url: "https://modeldiplomat.com/learn/glossary/fema-1999"
---

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Model Diplomat Research Team · Last reviewed June 22, 2026

TL;DR

- The Foreign Exchange Management Act, 1999 is an Indian statute that regulates foreign exchange transactions and external trade to facilitate orderly cross-border payments and capital flows.
- How does FEMA, 1999 differ from the FERA it replaced?
- What is the distinction between current and capital account transactions under FEMA?
- Who enforces FEMA, and what penalties apply?
- Is FEMA the same as PMLA?

[Civil Service & Diplomatic Exams](https://modeldiplomat.com/learn/civil-services/glossary)Updated June 22, 2026

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## Timeline

1. 29 December 1999

   Enacted by Parliament on and brought into force on 1 June 2000, it replaced the Foreign Exchange Regulation Act, 1973 (FERA), whose draconian, prosecution-o…

2. 1 June 2000

   Enacted by Parliament on 29 December 1999 and brought into force on , it replaced the Foreign Exchange Regulation Act, 1973 (FERA), whose draconian, prosecut…

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Example

In 2023 the Directorate of Enforcement issued show-cause notices to Byju's parent firm Think & Learn under FEMA, 1999, alleging foreign exchange contraventions of roughly ₹9,000 crore relating to inward and outward remittances.

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