Foreign Exchange Management ActMCQQuestion 5744 of 6
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Which of the following is the primary objective of the Foreign Exchange Management Act, 1999?

Options

ATo facilitate external trade and payments
BTo conserve and promote foreign exchange
CTo manage foreign exchange in a manner that does not affect the foreign exchange market
DTo regulate foreign exchange transactions in a way that promotes national security
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Correct Answer

✅ Option B — To conserve and promote foreign exchange

All Options:

  • ATo facilitate external trade and payments
  • BTo conserve and promote foreign exchange ✓
  • CTo manage foreign exchange in a manner that does not affect the foreign exchange market
  • DTo regulate foreign exchange transactions in a way that promotes national security

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Detailed Solution & Explanation

The Foreign Exchange Management Act, 1999 (FEMA) is an Act to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India. However, the primary objective is to conserve and promote foreign exchange.
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More Questions from Foreign Exchange Management Act

What is the penalty for contravening the provisions of the Foreign Exchange Management Act, 1999?

Which of the following authorities is responsible for administering the Foreign Exchange Management Act, 1999?

Explain the provisions of Section 6 of the Foreign Exchange Management Act, 1999, regarding the transfer or issue of any foreign security.

Discuss the key differences between the Foreign Exchange Regulation Act, 1973 (FERA), and the Foreign Exchange Management Act, 1999 (FEMA).

Analyse the provisions of the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019, as amended, and their impact on foreign investment in India.

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