If you’re selling, investing, or sending money across oceans, you quickly discover that rules are different on each side. The good news is that you don’t need a law degree to get it right. Below you’ll find the basics that keep your money flowing, your paperwork clean, and your business moving forward.
First, identify the type of transaction you’re doing. Are you exporting a product, receiving a payment from a foreign client, or remitting personal funds abroad? Each category triggers a different set of licences, taxes, and reporting obligations. In India, the Reserve Bank of India (RBI) and the Directorate General of Foreign Trade (DGFT) are the two main bodies you’ll interact with.
Key Rules for Indian Exporters
When you sell Indian goods to the U.S., Europe, or any other market, you need an Export Import (EXIM) code from the DGFT. This code proves you’re legit and lets you claim export incentives. Next, check the product’s HS‑code to see if it needs a licence or faces any restrictions. For example, certain chemicals or agricultural items have tighter controls.
Customs duty on exports is usually zero, but you may have to pay GST on inputs. The GST credit can be claimed back through the GST refund process, so keep every invoice. Shipping paperwork matters too – a commercial invoice, packing list, and bill of lading are mandatory. Miss any of these and customs can hold your shipment, causing delays and extra costs.
Don’t forget the payment side. Most Indian exporters use an Advance Payment Letter of Credit (L/C) or a wire transfer through an authorized dealer bank. An L/C gives you security: the buyer’s bank guarantees payment once you meet the shipping terms. If you go for a simple wire, make sure the buyer’s bank follows RBI’s foreign exchange guidelines.
Managing Money Transfers & Loans Abroad
NRIs and businesses moving money out of India face RBI limits. For personal remittances, the Liberalised Remittance Scheme (LRS) caps outward transfers at $250,000 per financial year. Use an authorized dealer bank to file the Form A2, which records the purpose – education, travel, investment, etc.
If you need a loan while living abroad, Indian banks do offer NRI loan products. They usually require a local Indian address for the property, proof of income abroad, and a good credit score. The loan amount often caps at 75% of the property’s value, and the interest rate aligns with domestic rates plus a small premium for the foreign risk.
For foreign investors setting up a venture in India, the Foreign Direct Investment (FDI) policy defines the sectors where you can own 100% versus those that need a local partner. Register your company with the Ministry of Corporate Affairs, obtain a Permanent Account Number (PAN), and then apply for a Foreign Investment Promotion Board (FIPB) approval if required.
Across all these steps, documentation is king. Keep digital copies of licences, bank statements, and tax filings for at least six years. When tax season arrives, you’ll thank yourself for that organized folder.
Finally, stay updated. Regulations change, and a policy tweak can affect your cash flow overnight. Subscribe to AP Startup Hub’s tag page for cross‑border transactions – we post the latest news, expert tips, and real‑world case studies so you can act fast.
Ready to take your business global? Start with the checklist above, get the right licences, and watch your cross‑border moves become smooth, predictable, and profitable.
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