Foreign Exchange Regulation Act
Encyclopedia
The Foreign Exchange Regulation Act (FERA) was legislation passed by the Indian Parliament in 1973 by the government of Indira Gandhi
and came into force with effect from January 1, 1974. FERA imposed stringent regulations on certain kinds of payments, the dealings in foreign exchange and securities and the transactions which had an indirect impact on the foreign exchange and the import and export of currency.
The purpose of the act, inter alia, was to "regulate certain payments, dealings in foreign exchange and securities, transactions indirectly affecting foreign exchange and the import and export of currency, for the conservation of foreign exchange resources of the country".
Coca-Cola was India's leading soft drink until 1977 when it left India after a new government ordered the company to turn over its secret formula for Coca-Cola and dilute its stake in its Indian unit as required by the Foreign Exchange Regulation Act (FERA). In 1993, the company (along with PepsiCo) returned after the introduction of India's Liberalization policy.
FERA was repealed in 1999 by the government of Atal Bihari Vajpayee
and replaced by the Foreign Exchange Management Act
, which liberalised foreign exchange controls
and restrictions on foreign investment.
Indira Gandhi
Indira Priyadarshini Gandhara was an Indian politician who served as the third Prime Minister of India for three consecutive terms and a fourth term . She was assassinated by Sikh extremists...
and came into force with effect from January 1, 1974. FERA imposed stringent regulations on certain kinds of payments, the dealings in foreign exchange and securities and the transactions which had an indirect impact on the foreign exchange and the import and export of currency.
The purpose of the act, inter alia, was to "regulate certain payments, dealings in foreign exchange and securities, transactions indirectly affecting foreign exchange and the import and export of currency, for the conservation of foreign exchange resources of the country".
Coca-Cola was India's leading soft drink until 1977 when it left India after a new government ordered the company to turn over its secret formula for Coca-Cola and dilute its stake in its Indian unit as required by the Foreign Exchange Regulation Act (FERA). In 1993, the company (along with PepsiCo) returned after the introduction of India's Liberalization policy.
FERA was repealed in 1999 by the government of Atal Bihari Vajpayee
Atal Bihari Vajpayee
Atal Bihari Vajpayee is an Indian statesman who served as the tenth Prime Minister of India three times – first for a brief term of 13 days in 1996, and then for two terms from 1998 to 2004. After his first brief period as Prime Minister in 1996, Vajpayee headed a coalition government from...
and replaced by the Foreign Exchange Management Act
Foreign Exchange Management Act
The Foreign Exchange Management Act was an act passed in the winter session of Parliament in 1999 which replaced Foreign Exchange Regulation Act. This act seeks to make offenses related to foreign exchange civil offenses...
, which liberalised foreign exchange controls
Foreign exchange controls
Foreign exchange controls are various forms of controls imposed by a government on the purchase/sale of foreign currencies by residents or on the purchase/sale of local currency by nonresidents.Common foreign exchange controls include:...
and restrictions on foreign investment.