• FEMA was enacted in 1999 to replace the Foreign Exchange Regulation Act (FERA).
  • Its primary goal is to promote external trade and maintain a stable foreign exchange market in India.
  • The act regulates all foreign exchange transactions, including the acquisition, holding, and settlement of foreign currency.
  • FEMA violations are treated as civil offences, with penalties imposed for non-compliance.
  • The Enforcement Directorate oversees the implementation and enforcement of FEMA regulations to combat economic crimes.