The first law on Foreign Exchange in India was the Foreign Exchange Regulation Act, 1947 which was enacted at that time with the specified objective to regulate the inflow of foreign capital in the form of branches and concerns with the substantial non-resident interest, and the employment of foreigners. Initially, the government policies aimed to preserve and consolidate the freedom of India preventing any type of foreign domination, political or economic. With the process of rapid industrialization of the country the need was felt to conserve foreign exchange as the country was facing severe balance of trade and balance of payment crisis. This led to the need to solicit donors or Foreign Aid Givers. Thereafter, the recommendation of the Public Accounts Committee and the Report of the Law Commission induced the Indian Government to re- direct the FERA act with the aim of conservation of foreign exchange rather than regulation of entry of foreign capital. Thus, the Foreign Exchange Regulation Act, 1973 was drafted with some changes for the effective implementation of the Government policy, to fulfill the acute shortage of foreign exchange in the country and removing the difficulties faced in the working of the previous enactment. FERA comprised several draconian provisions. Offences under FERA were considered as criminal offences liable for imprisonment. Inflow of foreign capital has immensely contributed to accelerated industrial growth, balance of payments and economic growth and served as a panacea for India's poor industrial and export performance. The Foreign Exchange Regulation Act, 1973 was abolished and replaced by the Foreign Exchange Management Act, 1999 (FEMA). The Prevention of Money Laundering Act, 2002 was legislated to prevent money-laundering and to provide for confiscation of property derived from, or involved in, money-laundering.