FERA or the Foreign Exchange Regulation Act was a law passed in 1973. It imposed severe restrictions on the types of payments and the transactions in foreign exchange and securities, and those transactions that impacted the foreign exchange as well as currency import and export indirectly. The purpose behind the FERA was to regulate payments and foreign exchange. It also intended to conserve foreign exchange, better the usage of foreign exchange in order to boost the country’s economic development. In 1998, the Indian government repealed FERA and replaced it with the FEMA or the Foreign Exchange Management Act. FEMA is more liberal and it eased foreign exchange controls and lessened restrictions on foreign investment.