INDIA Law and Practice Contributed by: Roshnek Dhalla, Bijal Ajinkya, Moin Ladha and Shailendra Bhandare, Khaitan & Co
be realised and repatriated to India within nine months from the date of the exportation, for all exporters. For goods exported to a warehouse established outside India, the proceeds shall be realised within 15 months from the date of shipment of goods. The amount rep - resenting the full export value of the exported goods shall be received through an authorised dealer bank (that is, the bank designated by the exporter in India) (the “AD Bank”). All shipments and receipts will have to be reported by the exporter in the Export Data Processing and Moni - toring System (EDPMS) of the RBI. The EDPMS cap - tures all the details of advance remittances received for exports. Further, AD Banks are required to report all inward remittances, including advances and old outstanding inward remittances received for exporta - tion of goods, to the EDPMS. The Export Direction also allows for an exporter to receive an advance payment against the exports (with or without interest) from a buyer outside India. In such cases, the exporter is required to ensure that shipment of goods is made within one year from the date of receipt of the advance payment – the rate of interest (if any) payable on the advance payment should not exceed the London Inter-Bank Offered Rate (LIBOR) or any other widely accepted or alternative reference rate plus 100 basis points, and the documents cov - ering the shipment are routed through the AD Bank through which the advance payment is received. Another key aspect to note here is that, in the case of any contravention of the prescribed timelines/ requirements mentioned in the Export Direction, such instances can be referred by the RBI to the Indian enforcement agencies that may attract a penalty of up to three times the value of the contravening export transaction. Therefore, it is imperative that all report - ing obligations of the exporter are duly adhered to and that, in the case of any contravention, the exporter necessarily approaches the RBI for its post facto approval to deal with such delays. In May 2025, the Central Government announced a landmark exemption on customs duties for artworks, antiquities and memorials of public character import - ed for public display. By removing the fiscal barrier of
customs duties for qualified institutions, the move is expected to facilitate the acquisition of rare and valu - able works by museums and public cultural bodies, aligning with India’s broader cultural diplomacy and heritage preservation goals. Overall, the exemption is expected to benefit public museums, cultural trusts and heritage bodies by lowering acquisition costs and enabling the importation of internationally significant works subject to certain procedural safeguards. 6.3 Gallery and Auction House Liability for Fake Art Usually, if there is a claim for fake art and the buy - er is able to prove that the work is fake, the auction houses/galleries are bound to take back the work and return the price (with interest) to the buyer. Going by jurisprudence, the courts have rejected the statute- barred defence of limitation of time, stating that the limitation period begins when fraud is discovered, and not when the sale occurred. 6.4 Pre-Sale Checks for Auction Houses and Galleries Before offering artistic works for sale, it is impera - tive that the auction houses/galleries do some due diligence regarding the authenticity of the work, its condition and (most importantly) identifying title gaps. One way of carrying out this check is to obtain as much information as possible about the ownership history of the artistic work from the seller of the artistic work. If this is a secondary sale of the artistic work and the seller has limited information, they can get the artistic work verified from an art expert or a historian – ie, to check whether the artistic work is recorded or will be included in a catalogue raisonné that is authored by an artist or a recognised expert, and to review publication and the history of the artistic work to see whether other people have also deemed the artwork to be authentic. The rigorous authentication process helps preserve the integrity of the art market, ensuring that buyers can trust the legitimacy of their purchases. Auc - tion houses/galleries must navigate these concerns, ensuring that the sale of artwork complies with legal and moral standards.
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