New Delhi: The Enforcement Directorate (ED) has initiated a decisive push to close a long-pending chapter of foreign exchange enforcement in India, setting an early 2026 deadline to conclude cases registered under the now-repealed Foreign Exchange Regulation Act (FERA). The move aims to bring finality to investigations and adjudication proceedings that have continued for over two decades after the law itself was scrapped.
FERA, a stringent criminal statute governing foreign exchange violations, was repealed in 1998 and replaced by the Foreign Exchange Management Act (FEMA) in June 2000. FEMA marked a significant shift in India’s economic policy framework, reclassifying most foreign exchange violations as civil offences. Despite this transition, hundreds of FERA-era cases have remained pending across courts and adjudicatory forums.
400–500 Old Cases Identified for Fast-Tracking
Senior ED officials said the agency has begun identifying approximately 400 to 500 cases where adjudication proceedings under FERA have been stalled for years. These include cases in which the accused individuals have passed away, are untraceable, or where the assets under investigation have already been liquidated or no longer exist. According to officials, such cases will be prioritised for fast-track closure to eliminate avoidable legal pendency.
“These matters have lost practical relevance but continue to consume administrative and judicial resources,” an official said.
The agency expects to complete the exercise over the next few months, with the first quarter of 2026 set as the immediate internal deadline.
ED Director’s Push to ‘Complete the Lifecycle’ of Cases
During a recent conference of ED officers held in Gujarat, ED Director Rahul Navin reiterated clear instructions to expedite the disposal of old FERA adjudication cases. He emphasised the need to ensure the “completion of the lifecycle” of all cases pending before various forums.
Officials said the directive reflects a broader institutional shift toward resolving legacy litigation and allowing the agency to focus on contemporary enforcement priorities, including money laundering and FEMA violations.
The closure of these cases, they added, would also ease the burden on courts that continue to hear matters with little prospect of meaningful resolution.
From FERA to FEMA: A Fundamental Legal Shift
FERA was widely regarded as a harsh, control-oriented law, criminalising foreign exchange violations and empowering authorities with arrest, prosecution, and custodial provisions. It reflected India’s tightly regulated economic regime prior to liberalisation.
With the onset of economic reforms, the government replaced FERA with FEMA in 1999 to facilitate foreign trade and investment. FEMA focuses on the management of foreign exchange rather than its regulation, and most violations under the law attract monetary penalties instead of criminal prosecution.
Legal experts note that the continued pendency of FERA cases has been at odds with the spirit of India’s post-liberalisation legal and economic framework.
A Legacy Dating Back to 1947 Nears Its End
Officials pointed out that India’s foreign exchange enforcement regime predates FERA 1973. The first version of the law was enacted in 1947, soon after Independence. In 1956, the central government established the Enforcement Directorate under the Department of Economic Affairs to investigate violations under FERA.
The 1947 law was replaced by FERA 1973, which in turn gave way to FEMA in 1999. The ED now believes that closing FERA cases pending for more than 25 years is both administratively necessary and legally appropriate.
Relief for Courts and Enforcement Machinery
ED officials said that winding up these cases will significantly reduce “legacy litigation” that has persisted without substantive outcomes. The move is expected to free up manpower, streamline case management, and allow enforcement agencies and courts to focus on present-day economic offences.
Experts view the decision as a symbolic and practical closure of India’s transition from a restrictive, control-based foreign exchange regime to a modern, compliance-driven framework aligned with global economic practices.
