The foreign exchange control regime in India has experienced a radical change in the form of a restrictive and conservationist regime established by the Foreign Exchange Regulation Act (FERA), 1973 to the liberalized and facilitative regime that is provided by the Foreign Exchange Management Act (FEMA), 1999. The paper critically analyzes the development, institutional form, legal framework, and practical efficiency of the foreign exchange regulation of India in the globalization and economic reforms. Using the information provided by the Reserve Bank of India, the research points at the fact that the reserves of foreign exchange increased dramatically, the inflows of foreign direct investments became more substantial, and the resilience of the external sector improved. Nevertheless, in spite of these successes, there are still various challenges like regulatory complexity, overlapping jurisdiction, inefficiencies in enforcement, and partial convertible of capital account. This paper also examines judicial interpretations, compares the regulatory approach used in India with the international practice, and assesses new issues like digital currencies and financial globalization. It ends with suggestions of overall reforms that will make the financial system more transparent, and easier to comply with, make the different institutions more coordinated and make the system more adaptable in a constantly changing global financial landscape.
Bera et al. (Wed,) studied this question.