Exchange Rate Regimes — Policy Reforms

Entry	Year	Description	Impact
Policy Shift (not constitutional amendment)	1992-1993	The introduction of the Liberalized Exchange Rate Management System (LERMS) in March 1992, followed by the unification of the exchange rate in March 1993, marked India's decisive move from a fixed exchange rate system to a market-determined managed float regime. This was a fundamental 'amendment' to India's exchange rate policy.	Significantly enhanced export competitiveness, improved foreign exchange reserves, and provided the RBI with greater flexibility in monetary policy. It was a cornerstone of India's post-1991 economic liberalization, integrating India more deeply into the global economy.
Replacement of FERA with FEMA	1999	The Foreign Exchange Management Act (FEMA) replaced the Foreign Exchange Regulation Act (FERA). FERA was a highly restrictive law, reflecting an era of tight capital controls and a fixed exchange rate. FEMA, in contrast, adopted a facilitative approach, aiming to promote orderly development of the foreign exchange market.	Provided the legal framework for a more liberalized capital account and a market-determined exchange rate. It decriminalized most foreign exchange offenses, fostering a more investor-friendly environment and aligning India's legal framework with its managed float regime and gradual capital account convertibility.