Industry News for February 2026

New FEMA trade norms to take effect from October 1, 2026

The Reserve Bank of India (RBI) has notified the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, along with detailed operational directions, which will come into force from October 1, 2026. The new framework will govern all foreign exchange transactions linked to exports, imports and merchanting trade, replacing the existing provisions under the Foreign Exchange Management Act.

The regulations apply uniformly to goods and services, including software exports and service imports, and seek to strengthen reporting, monitoring and closure of trade-related transactions through authorised dealer (AD) banks. A key objective is to bring greater consistency and standardisation in trade data reporting across the system.

For exports routed through non-Electronic Data Interchange (non-EDI) ports, AD banks must upload Export Declaration Form (EDF) details into the Export Data Processing and Monitoring System (EDPMS) within five working days of receipt, irrespective of shipment value. The same five-day timeline applies to service exports, including software, based on exporter submissions.

Similarly, import documents for non-EDI ports must be recorded in the Import Data Processing and Monitoring System (IDPMS) within five working days, with service import details also covered. Banks are required to report all related inward and outward remittances and actively monitor pending entries to ensure timely closure of transactions.

Sebi introduces digital signature facility to ease FPI onboarding

The Securities and Exchange Board of India (Sebi) has announced a new digital signature facility for foreign portfolio investors (FPIs), aimed at simplifying and speeding up the onboarding process. Under the new mechanism, FPIs can apply for a digital signature certificate (DSC) directly through the common application form used for registration.

Sebi said the enhancement integrates the FPI registration application and the DSC application into a single, unified workflow. This is expected to reduce duplication, improve efficiency and ease compliance for overseas investors seeking access to Indian capital markets.

FPIs were first permitted to use digital signatures for registration-related documentation in 2023. However, the earlier process required separate steps for registration and procurement of digital signatures. By embedding both processes into one application, the regulator aims to remove procedural friction and make onboarding more seamless.

The move is part of Sebi’s broader push towards digitisation and process rationalisation across market intermediaries. Faster onboarding is expected to improve investor experience and support capital inflows, particularly as global investors seek more efficient market access. Market participants see the change as a practical step that aligns regulatory processes with global best practices in digital documentation and identity verification.

Sebi notifies revamped stock broker regulations after three decades

The Securities and Exchange Board of India (Sebi) has notified the Stock Broker Regulations, 2026, marking the first comprehensive overhaul of broker regulations in more than 30 years. The new rules replace the earlier framework that had been in place since 1992 and are aimed at updating compliance norms in line with changes in market structure and business models.

Under the revised regulations, stock brokers are permitted to undertake additional activities that are regulated by other financial sector authorities, subject to compliance with applicable norms. Brokers have also been allowed to provide incidental investment advice to their broking clients, reflecting the growing convergence between execution and advisory services.

The regulations further allow stock brokers to act as underwriters using their own net worth or funds, though this is subject to specific conditions and safeguards. Sebi has sought to balance expanded business flexibility with regulatory oversight to protect market integrity.

Notably, the final notification does not include a formal definition of algorithmic trading, which had been proposed earlier in the consultation paper. Market participants expect Sebi to address algorithmic trading separately through future guidelines. The updated regulations are intended to simplify language, remove redundancies and provide greater clarity for compliance by brokers.

E-way bill generation hits record high of 138.39 million in December

India’s goods movement reached a new high in December, with e-way bill generation rising 23.6 per cent year-on-year to 138.39 million, according to data released by the Goods and Services Tax Network (GSTN). The figure surpassed the previous record of 132 million recorded in September, underscoring strong momentum in economic activity during the festive and year-end period.

In November, e-way bill generation had grown at a relatively moderate pace of 6.5 per cent to 129.8 million. The sharp acceleration in December reflects increased trade volumes, improved compliance, and higher participation from businesses across sectors. An e-way bill is a mandatory electronic document under the GST regime for the movement of goods valued above Rs. 50,000 and enables real-time tracking of consignments across states.

Experts attributed the surge partly to GST 2.0 rate rationalisation, which reduced tax incidence on several goods, encouraging higher formal trade. The rise has also been supported by an increase in GST registrations following the rollout of a fast-track registration scheme, indicating growing formalisation of businesses and supply chains.

Centre considers scheme to boost domestic shipping container manufacturing

The central government is working on a financial assistance scheme to promote domestic manufacturing of shipping containers as part of its broader push to strengthen India’s maritime and logistics capabilities, according to officials and industry executives familiar with the discussions. The initiative is expected to support both the setting up of new production lines and the expansion of existing manufacturing facilities.

The Ministry of Ports, Shipping and Waterways has begun preliminary deliberations on the proposal, with early estimates suggesting an outlay of around Rs. 12,000 crore. The objective is to build an annual container manufacturing capacity of approximately 600,000 units, reducing India’s dependence on imports and improving supply-chain resilience.

Industry stakeholders have long highlighted the strategic importance of container manufacturing, particularly after global supply disruptions exposed vulnerabilities in container availability. A domestic manufacturing base could lower logistics costs, support export growth and create employment opportunities in allied sectors such as steel and fabrication.

While the ministry has not officially commented, the proposed scheme aligns with the government’s broader manufacturing and Atmanirbhar Bharat agenda, as well as efforts to position India as a competitive maritime and logistics hub in the region.

Sebi extends timeline for additional incentive structure for mutual fund distributors

The Securities and Exchange Board of India (Sebi) has extended the implementation deadline for the additional incentive structure for mutual fund distributors (MFDs) to March 1, following feedback from industry participants citing operational challenges. The framework was earlier scheduled to come into effect from February 1, 2026.

The incentive structure is aimed at encouraging distributors to onboard new individual investors from B-30 cities—locations beyond the top 30 cities—and new women investors from any city. Under the revised framework, asset management companies will pay distributors 1 per cent of the first lump-sum investment or first-year SIP amount, capped at Rs. 2,000, provided the investor remains invested for at least one year.

The additional incentive will be funded from the 2 basis points already earmarked for investor education and will be paid over and above existing trail commissions. However, Sebi has clarified that dual incentives will not be permitted for the same woman investor from B-30 cities.

The incentive will not apply to ETFs, certain fund-of-funds, or very short-duration schemes. The extension is expected to give AMCs and distributors more time to align systems and processes for smooth implementation.

Export incentives extended to postal shipments from January 15

Export incentive schemes such as duty drawback, Remission of Duties and Taxes on Exported Products (RoDTEP) and Rebate of State and Central Taxes and Levies (RoSCTL) will now be available for postal shipments from January 15, the Central Board of Indirect Taxes and Customs (CBIC) said. The move is expected to significantly benefit micro, small and medium enterprises (MSMEs), particularly those based in smaller towns and remote regions.

According to the finance ministry, extending export incentives to postal exports will create a level-playing field for exporters using the postal channel and support the growth of cross-border e-commerce. Until now, exporters using courier or cargo channels had greater access to incentive schemes, while postal exporters faced limitations.

The measure is aimed at improving competitiveness of small exporters by lowering costs and simplifying access to incentives. Postal exports are increasingly being used by MSMEs and e-commerce sellers due to their wide reach and relatively lower logistics costs.

By enabling incentives for postal shipments, the government hopes to unlock new export opportunities, expand formal participation in international trade and strengthen India’s position in the global e-commerce ecosystem, while leveraging the extensive network of the postal system.

China posts world-record $1.2 trillion trade surplus in 2025

China ended 2025 with a trade surplus of about $1.2 trillion, the largest ever recorded by any country, underscoring the resilience of its export-led growth despite higher US tariffs. Customs data showed exports rose 6.6 per cent year-on-year in December, the fastest pace in three months and well above market expectations of around 3 per cent. Imports also exceeded forecasts, increasing 5.7 per cent during the month.

As a result, China posted a December trade surplus of $114 billion, the highest in six months and among the strongest monthly readings on record. For the full year, the surplus expanded nearly 20 per cent over 2024 levels, crossing the trillion-dollar mark even before December.

The data highlights the speed with which Chinese exporters have adjusted to external pressures. Monthly trade surpluses exceeded $100 billion on seven occasions in 2025, compared with just once in the previous year. Export growth remained robust even as shipments to the US weakened, reflecting China’s success in diversifying markets across Asia, the Middle East and emerging economies, helping sustain trade dominance despite a challenging global environment.

Cooperative ride-hailing platform Bharat Taxi to launch by January-end

The cooperatives-backed ride-hailing service Bharat Taxi will be formally launched in Delhi and other cities by the end of January, following a successful pilot phase, a senior official from the Ministry of Cooperation said. The platform, operated by Sahakar Taxi Cooperative Ltd, was introduced on a pilot basis in the national capital on December 2, 2024.

According to the ministry, the service has recorded an average of around 5,500 rides daily during the soft launch, including nearly 4,000 airport trips and 1,500 rides across other locations using cabs, autos and bikes. Over 1.4 lakh drivers have registered on the platform so far.

Bharat Taxi is promoted by eight major cooperative organisations, including Amul, IFFCO, KRIBHCO, NAFED, NDDB, NCEL, NCDC and NABARD, with driver representatives also on the board. The app operates on a zero-commission model, allowing drivers to retain full earnings, with profits distributed among cooperative members.

The platform offers features such as transparent fares, real-time tracking, multilingual support and 24×7 customer service, and is integrated with metro and transit systems.

SEBI sets phased compliance timeline for tighter merchant banker norms

The Securities and Exchange Board of India has laid out phased timelines for compliance with its revised merchant banker regulations, which introduce higher capital adequacy, liquid net worth, underwriting limits and stricter governance standards. The new framework comes into effect from January 3, 2026, and applies to both new and existing merchant bankers.

Applicants seeking registration after the effective date must meet enhanced requirements upfront, while existing entities have been given transition time until January 2028. For Category I merchant bankers, minimum net worth will increase to Rs. 25 crore by January 2027 and further to Rs. 50 crore by January 2028, with proportionate liquid net worth thresholds. Category II merchant bankers will face lower, but progressively rising, capital requirements over the same period.

SEBI has also capped underwriting exposure at 20 times a merchant banker’s liquid net worth and clearly defined liquid assets eligible for computation. Governance norms have been tightened, including mandatory appointment of an independent compliance officer by April 2026.

In addition, merchant bankers must generate minimum cumulative revenue from permitted activities over three years, failing which registration may be cancelled. The first revenue assessment will be undertaken from April 2029.

Centre relaxes KYC norms for company directors to ease compliance

The central government has relaxed know-your-customer requirements for directors of private companies, reducing the compliance burden as part of broader efforts to improve ease of doing business. Under the revised rules notified by the Ministry of Corporate Affairs, directors will now be required to complete KYC filings once every three years instead of annually.

However, directors must still update changes in personal details such as address, email or phone number within 30 days of any modification. The revised framework applies to individuals holding a Director Identification Number as on March 31 of the relevant financial year.

The ministry said the changes are based on recommendations of the High-Level Committee on Non-Financial Regulatory Reforms and stakeholder consultations with concerned departments. The move is intended to adopt a more risk-based regulatory approach without diluting safeguards related to anti-money laundering and counter-terrorist financing.

Legal and compliance experts said the revision brings regulatory requirements in line with stable risk profiles, particularly for directors whose details remain unchanged over long periods. The relaxation is also expected to reduce procedural delays and compliance costs for companies, especially smaller firms and startups, while retaining accountability through timely reporting of any changes in director information.

Government rolls out Rs. 7,295 crore package to boost MSME export financing

The central government has launched two targeted schemes involving interest subvention and collateral support, with a combined allocation of Rs. 7,295 crore over six years from FY26 to FY31, to improve access to trade finance for micro, small and medium enterprises (MSMEs), particularly exporters. The measures form part of the Rs. 25,060 crore export promotion mission approved by the Union Cabinet in November.

The key initiative, titled Interest Subvention for Pre- and Post-Shipment Rupee Export Credit, aims to provide MSME exporters access to credit at rates below prevailing market levels. The scheme has a tentative outlay of Rs. 5,181 crore over six years, with the government initially clearing arrears of Rs. 830 crore. A base interest subvention of 2.75 per cent has been provided, along with a provision for additional incentives for exports to notified under-represented or emerging markets, subject to operational readiness.

Government officials said the scheme replaces the earlier Interest Equalisation Scheme, which was discontinued at the end of December 2024. Unlike the previous framework, the revamped programme will focus primarily on small and first-time exporters, with caps on annual benefits. The objective is to ease working capital constraints amid global trade headwinds rather than extend support across all exporter categories.

India’s GDP growth seen at 7.4% in FY26: NSO advance estimates

India’s economy is projected to grow by 7.4 per cent in FY26, up from an estimated 6.5 per cent in FY25, according to the first advance estimates of gross domestic product released by the National Statistics Office (NSO). The estimates point to continued resilience in economic activity despite ongoing external challenges.

The growth outlook has been supported by a sharply lower GDP deflator, estimated at a five-decade low of 0.5 per cent. As a result, nominal GDP growth for FY26 is projected at 8 per cent, the slowest pace since the Covid-impacted FY21. The gap between nominal and real GDP growth has narrowed to 60 basis points, the smallest since 2011-12.

The estimated real GDP growth of 7.4 per cent is marginally higher than the Reserve Bank of India’s revised projection of 7.3 per cent. The outlook assumes a moderation in growth in the second half of FY26 to 6.9 per cent from 8 per cent in the first half, largely due to a high base effect and a likely slowdown in central government expenditure.

The advance estimates incorporate industrial production data up to November and select leading indicators for December. The figures remain provisional and will be revised once the new 2022-23 base year is implemented and fuller data becomes available.