The Reserve Bank of India, through Circular No. RBI/2026-27/05 dated April 2, 2026, explicitly permitted Indian residents to exchange rupees for foreign currency at forex counters located in airport departure areas. The circular removes regulatory ambiguity that had previously caused some authorised dealers to decline rupee-to-forex conversion at departure terminals, easing the pre-departure currency exchange process for outbound travellers.
Background
India's international passenger traffic has grown steadily, crossing 7 crore outbound travellers in 2025-26. Despite this growth, currency exchange at airport departure areas had been a persistent friction point. The regulatory framework governing authorised dealers at airports did not explicitly address whether departure-area forex counters could accept Indian rupees from resident travellers for conversion to foreign currency.
This ambiguity led to inconsistent practices: some airport forex counters offered rupee exchange while others declined, directing travellers to pre-departure conversion at city branches or arrival-area counters at the destination. The RBI received representations from both the travel industry and consumer bodies requesting clarity on this issue.
Key Provisions
The circular establishes a simple and direct framework:
Explicit permission: Residents are now expressly permitted to exchange Indian rupees for foreign currency at forex counters in airport departure areas operated by authorised dealers.
LRS limits apply: Exchanges are subject to the existing Liberalised Remittance Scheme limits (currently USD 250,000 per financial year) and applicable PAN/KYC requirements for transactions above prescribed thresholds.
Authorised dealer compliance: Airport forex counters must comply with all existing RBI regulations regarding customer identification, transaction documentation, and reporting, consistent with their authorised dealer licence conditions.
Implications for Practitioners
For authorised dealers and their compliance teams, the circular provides regulatory certainty to standardise services across all airport locations. Forex companies operating airport counters should update their standard operating procedures to include rupee-to-forex conversion at departure terminals.
Banking lawyers advising authorised dealers on FEMA compliance should note that while the circular simplifies the service offering, the underlying reporting and documentation obligations remain unchanged. Transactions above the prescribed threshold continue to require PAN verification and Form A2 declarations.
For the travel industry, this development reduces a significant customer friction point. Travel agents and tour operators can now advise clients that last-minute currency conversion is available at departure, reducing the need for advance forex procurement.
Frequently Asked Questions
Can non-residents also exchange rupees at departure forex counters?
Non-residents were already permitted to reconvert unspent Indian rupees to foreign currency at departure. This circular specifically addresses the position for resident Indians, who can now also avail of the facility without ambiguity. Both residents and non-residents are subject to applicable documentary and reporting requirements.
Does this circular apply to all Indian airports with international terminals?
Yes. The circular applies to all authorised dealers operating forex counters in departure areas of airports across India. However, the actual availability depends on whether the airport has licensed forex counter operators in its departure terminal — smaller international airports may have limited or no forex counter presence.