General Information

First of all, the Indian rupee is partially convertible, which means that in order to carry out regular import and export trade flows you can easily do so by the banks by presenting the underlying trade documents.

On the other hand, capital account transactions, such as a capital injection or intragroup loans, are subject to more rigourous control that requires upstream approvals from the regulator (The Reserve Bank of India) via your bank approved as an ‘Authorised Dealer’.

For a local location, a foreign company, wishing to establish a fixed place of business in India, can opt either for a permanent and perpetual format (private limited etc), or for an extension of the foreign parent company (Liaison Office – LO etc). In both cases, each entity is governed by the same set of regulations in several variants.

Means of Payment & Banking Specificities

The Indian banking system is very well developed. For domestic payments to businesses, e-transfer is commonly used apart from checks, bank cards and cash payments.

For offshore payments, if you are exporting or importing to India, it is strongly recommended to prioritise documentary credit. Documentary delivery is also a common practice but it presents the risk that your buyer in India will not accept it, The other solutions to consider are LC with UPAS clause, credit discount / invoice; (reverse) forfaiting, supplier / buyer credit, etc. If the notoriety of the Indian issuing bank lacks visibility, it is advisable to request a letter of credit confirmed by international banks such as the Crédit Agricole group.

Indian banks have a very efficient and liquid Indian rupee collection system for local operations. For foreign currency transactions the 5 main currencies most used for invoicing are USD, EUR, GBP, JPY, CHF.

For all transfers in India, you must be particularly vigilant about the payment details, the address and the IFSC code of the beneficiary bank branch.

For any foreign correspondence, use the swift direct code with the three suffixes of the agency concerned and avoid the general swift of the banking group.