The Parliament has enacted the Foreign Exchange Management Act,1999 to replace the Foreign Exchange Regulation Act, 1973. This Act came into force on the 1st day of June, 2000. The Central Govt. have established the Directorate of Enforcement with Director and other officers, for the purpose of taking up investigations of cases under the said Act.
The object of the Act is to consolidate and amend the law relating to foreign exchange with objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India.
This Act extends to the whole of India and also apply applies to all branches, offices and agencies outside India owned or controlled by a person resident in India. It is also applicable to any contravention committed outside India by any person to whom this Act is applicable.