How do I write off an unrealised export bill, and what are the limits?

What does a write-off actually do?

It extinguishes the repatriation obligation on an export bill that will not be realised, so that the EDPMS entry can be closed without the money ever arriving. That is the whole of it, and the two things it is not are worth stating first, because both cause exporters to reach for it at the wrong moment.

• It is not a write-off in the accounting sense. Booking a bad debt in your own ledger does nothing to the regulatory position. The obligation to repatriate sits under FEMA and is discharged by the AD bank acting under the Master Direction, not by your auditor.
• It is not a way to close a bill you were paid for. An entry showing an outstanding balance against money already in your account is a matching failure, not a non-realisation. That is corrected by lodging and apportioning the credit, and it consumes none of the allowance below.
• It is rationed. Unlike the small-value closure route, write-off draws on a percentage allowance that resets annually and is shared between you and your bank. Spending it on a bill that had a cheaper route is a real cost, because the allowance is not there for the next bill.

The governing text throughout this guide is the RBI FED Master Direction No. 16/2015-16, Export of Goods and Services, paragraphs C.23 and C.24, with the reduction provisions at C.17 and C.31 referred to where the two get confused.

How much can I write off?

Three percentages, depending on who is doing the writing off and what you are. They are not alternatives you pick between. The self limits and the bank limit are reckoned cumulatively, so they behave as one pool drawn on from two sides.

Source: RBI FED Master Direction No. 16/2015-16, Export of Goods and Services, paras C.23.1, C.23.2, C.23.2(c), C.23.5, C.23.6 and C.24. Limits and conditions are summarised; confirm the current text and your own eligibility with your AD bank before relying on any of them.

What is the percentage a percentage of?

Total export proceeds realised during the calendar year preceding the year in which the write-off is being done. Every one of those words is load-bearing, and each of them is a place exporters go wrong.

Which cases qualify?

Being within the limit is not enough. The non-realisation has to fall within a qualifying ground, and the bank has to be able to see evidence of it. The grounds recognised under para C.23.2 are the familiar commercial failures, and each has a documentary form the bank expects.

Two conditions sit across all of them. The amount must have been outstanding for more than one year , which rules out using write-off as a fast exit from a recent bill; and there must be documentary evidence of the efforts made to realise the money. The second is the one exporters are least prepared for, because those efforts were made informally (a sequence of emails and calls) and were never assembled into anything a bank could put on a file.

When can the bank write off without a limit?

Para C.23.3 allows the AD bank to write off without regard to the percentage limits in three specific situations, provided it is satisfied with the documentary evidence. These are narrow, and they are worth checking before you plan around the percentages, because a file that fits one of them does not consume the annual allowance at all.

• The buyer has been declared insolvent and an official liquidator's certificate is available. Note the distinction from the ordinary insolvency ground in the previous section: what lifts the limit here is the official liquidator's certificate, not insolvency as such.
• The balance has been settled through the Indian Embassy, a Foreign Chamber of Commerce or a similar organisation. This is the route for a case that was mediated rather than litigated, and the settlement document is what the bank reads.
• The goods were auctioned or destroyed by the Port, Customs or Health authorities of the importing country. A common outcome for perishables and for consignments refused entry on a standards or labelling failure, and the authority that acted is the one whose document is needed.

Separately, para C.24 provides the settled-insurance-claim route, which is likewise not restricted to 10 per cent. If ECGC or another IRDA-regulated insurer has paid your claim, that paragraph rather than the percentage table is where your case belongs. And the rupee claim itself, being a domestic receipt, does not count as export realisation however large it is.

When is write-off not available at all?

Para C.23.7 closes the route off in two situations regardless of the limits, the grounds or the documentation. Neither is a matter of degree, and an exporter who discovers one of them late has spent weeks preparing an application that could never have succeeded.

Both exclusions argue for the same first step: sort the residue by destination country and by whether anything on the file is under enquiry, before computing allowances. That ordering takes an afternoon and tells you which part of the balance has a route and which part needs a different conversation.

What do I have to give up?

Proportionate export incentives availed on the affected bill, under para C.23.5, and the AD bank is required to see documentary evidence of the surrender rather than accept an assurance that it will happen.

The word doing the work is proportionate. Where a bill is written off in part, the surrender follows the part written off rather than the whole benefit; where it is written off in full, so is the benefit. The incentives in scope are the ones computed on the realised value of that export. In practice the scheme benefits claimed against that shipping bill.

The same condition attaches to the invoice-reduction route, which is one of the few things the two procedures genuinely share.

What does the bank want to see?

A write-off application is assembled rather than written. The pack below is what the provisions call for; individual banks add their own covering format on top, and asking for that format at the start saves a round.

• A Chartered Accountant's certificate (para C.23.6). This is a named requirement, not a general good practice. Where a page or a banker describes the certificate as optional for small amounts, they are describing the bank's own tolerance rather than the provision.
• The bill-level schedule. Shipping bill number and date, invoice number and value, amount realised, amount outstanding, and the ground relied on for each. One row per bill, because the allowance is computed across the year and the bank has to total it.
• Evidence of the qualifying ground as set out in section 4. The insolvency document, the dispute correspondence, the force majeure record, the tracing trail, or the reasoned account of why recovery is uneconomical.
• Evidence of recovery efforts. The demand letters, reminders and buyer correspondence, in date order. This is the part most often missing and the easiest to lose.
• Evidence of proportionate surrender of export incentives under para C.23.5, as above.
• Your computation of the base and the headroom remaining. Total export proceeds realised in the preceding calendar year, the applicable percentage, anything already written off in the current year by you or by the bank, and the balance available. Supplying this rather than waiting to be asked is what moves an application through in one round.

What should I try before a write-off?

Three things, in this order. The reason for the order is that each step is cheaper than the next and shrinks what the next step has to handle. And the first one usually shrinks it dramatically.

Those close on your own declaration under RBI A.P. (DIR Series) Circular No. 12 (RBI/2025-26/89) dated 1 October 2025, without detailed documentary evidence and without penal charges, with quarterly consolidated declarations accepted. A reduction in declared value, including outright non-realisation, can be declared by this route. So a long tail of e-commerce shipments never reaches the write-off provisions at all. See

the small-value closure guide

. </>), }, , , ]} />

How is this different from reducing the invoice value?

They are different provisions answering different questions, and they are confused constantly. Including in published guidance, where the reduction provision's base gets quoted as if it governed write-off. The question that separates them is what happened commercially.

What does this look like on real numbers?

An e-commerce exporter finishes calendar 2025 having realised

Rs 6.2 crore

of export proceeds. In September 2026 the bank's pending report shows

Rs 1.14 crore

outstanding across 260 shipping bills. The exporter is not a Status Holder, so the self write-off limit is

5 per cent

of the preceding calendar year's realisations.

Rs 31 lakh

. Against Rs 1.14 crore outstanding that looks hopeless, which is exactly the point at which exporters conclude the provision is useless and stop. </> } result={ <> Rs 5 lakh against Rs 31 lakh of headroom, on a qualifying ground, outstanding over a year. The file that looked impossible at the top is comfortably inside the limit by the time it reaches the provision. And

Rs 26 lakh

of allowance is still available for next year's residue. The work that made the difference was reconciliation, not the application. </> } >

Working the order in section 9 rather than applying against the headline number:

Figures invented for illustration. The percentages, the base and the conditions are those in paras C.23.1, C.23.2, C.23.5 and C.23.6; the Rs 10 lakh route is A.P. (DIR Series) Circular No. 12 (RBI/2025-26/89) dated 1 October 2025. The proportions between the four rows are typical of a marketplace seller's book and are not a rule.

Which figures does this guide not state?

Several numbers sit next to this one and are deliberately left to the pages that carry their citations, because quoting them here would put a second copy of each into circulation.

• The realisation period. How long you have before a bill is unrealised at all is a separate rule with its own effective dates, and it changes for shipments on and after 1 October 2026. See when the realisation clock actually starts .
• The small-value closure mechanics. This guide names the Rs 10 lakh route and its circular; the declaration format, the quarterly consolidation and the penal-charge position are set out at closing EDPMS entries under Rs 10 lakh .
• Bank charges for a write-off application. These vary by bank and are not prescribed by the Master Direction. The framework banks charge within is at FEDAI rules and exporter bank charges .
• Penalty exposure under FEMA. What a contravention costs is a compounding question rather than a write-off question, and this guide states no figure for it.
• Turnaround times for a write-off approval or an RBI reference. No turnaround is prescribed. Any specific number for this is someone's experience rather than a rule, and it is not stated here.

Frequently asked questions

How much of my unrealised export proceeds can I write off?

There are three limits and they share one base. An exporter other than a Status Holder may self write-off up to 5 per cent; a Status Holder Exporter up to 10 per cent; and the AD Category-I bank may write off up to 10 per cent where you have been its customer for at least six months and are fully KYC and AML compliant. The base for all three is total export proceeds realised during the calendar year preceding the year in which the write-off is being done. The self and AD-bank limits are reckoned cumulatively, so a self write-off and a bank write-off in the same year draw on one allowance rather than two. Anything above the applicable limit needs prior approval of the Reserve Bank. Source: RBI FED Master Direction No. 16/2015-16, Export of Goods and Services, paras C.23.1, C.23.2 and C.23.2(c).

Is the write-off limit a percentage of the bill I want to write off, or of something else?

Of something else, and this is the single most common error. The percentage is applied to your total export proceeds realised during the calendar year preceding the year of write-off. The money that actually came in, in the year before. It is not a percentage of the outstanding bill, not a percentage of the total balance showing in your EDPMS ledger, and not a percentage of turnover. It is also a calendar year rather than a financial year, which catches out exporters who compute everything else on an April-to-March basis. The practical consequence is that your write-off headroom is set by how much you realised last year, so a good year creates headroom and a bad year removes it. Which is the opposite of what an exporter in difficulty expects.

Should I apply for a write-off before or after trying anything else?

After, and usually well after, because three cheaper routes sit ahead of it and each one is likely to collapse most of the balance. First lodge and apportion the settlements you already hold: a large part of a reported outstanding is money that arrived and was never matched to the bill it pays, and correcting that costs nothing and consumes no allowance. Second, for shipping bills at Rs 10 lakh or below, close on your own declaration under RBI A.P. (DIR Series) Circular No. 12 (RBI/2025-26/89) dated 1 October 2025, including a reduction in declared value. Quarterly consolidated declarations are accepted. Third, consider a reduction in invoice value, which is a different provision with its own base. Only the residue after all three is a write-off question, and running the order backwards puts a write-off request in front of your bank for money that was in your account the whole time.

What do I have to give up to get a write-off?

Proportionate export incentives availed on the affected bill, and the AD bank is required to see documentary evidence of that surrender rather than take it on assurance (para C.23.5). This is a condition rather than an afterthought, and it is the part that creates a second problem while you are solving the first: applying for a write-off while continuing to hold a RoDTEP or drawback benefit computed on the full value leaves an inconsistency on the DGFT side of your record. You also need a Chartered Accountant's certificate under para C.23.6, documentary evidence of the efforts you made to realise the money, and the amount must have been outstanding for more than one year.

Are there cases where write-off is not available at all, whatever the limits say?

Two, and both are absolute rather than a matter of size. Para C.23.7 excludes exports to countries with an externalisation problem (where the buyer has deposited the value in local currency but repatriation has not been permitted by that country's authorities) and it excludes EDF or SOFTEX entries under investigation by agencies such as the Enforcement Directorate, the DRI or the CBI, or bills that are the subject of civil or criminal proceedings. Establish early whether any part of your residue falls into either bucket, because if it does, the route you were planning around does not exist and the file needs a different strategy rather than a better application.

My credit insurer paid the claim. Does that count as realisation?

No, and the distinction matters in two directions. A rupee claim settled by ECGC or another IRDA-regulated insurer is not export realisation, so it does not close the bill the way a foreign inward remittance would. But para C.24 provides its own write-off route on a settled claim, and that route is not restricted to the 10 per cent ceiling that governs an ordinary AD-bank write-off. What the bank wants is documentary evidence from the insurer that the claim has been settled. The practical point is that an exporter whose insurer has already paid should not be applying under the percentage limits at all. A different paragraph covers them, with no percentage in it.

Update history

• 2026-09-16 First published.