Recently RBI liberalized the procedure relating to payments for exports/imports, through circular (A.P. (DIR Series) Circular No.70) dated November 8th  2013 (‘Circular’), allowing third party payments for exports and import transactions.

Earlier, payment for exports was to be received from the overseas buyer named in the Export Declaration Form (EDF) and currency of such payment should be as per the final destination of the goods/services irrespective of residential status of the buyer.  Similarly, payments for import should be made to the original overseas seller of the goods and importer needs to satisfy that goods equivalent to remittance have been imported.

Guidelines have been laid for easing the provisions of both export and import transactions, under the Circular.


Authorized dealer (AD) banks may allow payments for export of goods / software to be received from a third party (a party other than the buyer) subject to conditions as under:

a) Firm irrevocable order and a tripartite agreement should be in place.

b) Third party payment should come from a Financial Action Task Force (FATF) compliant country and through the banking channel only. Click here for the updated list of FATF countries.

c) The exporter should declare the third party remittance in the Export Declaration Form and would be responsibility of the exporter to realize and repatriate the export proceeds from such third party named in the EDF.

d) In case the export shipments are for few restricted countries like Sudan, Somalia, and such other countries, payments for the same may be received from an ‘Open Cover Country’. Open cover Country list will be restricted to FATF compliant list as mentioned in point (b) above. Click here for the classification of the countries.



AD banks are allowed to make payments to a third party for import of goods, subject to conditions as under:

a) Firm irrevocable purchase order (or) tripartite agreement should be in place.

b) Third party payment should be made to a Financial Action Task Force (FATF) compliant country and through the banking channel only. Refer point A (b) of export, above.

c) The Invoice and Bill of Entry should contain a narration that the related payment has to be made to the (named) third party along with details of shipper.

d) Importer should comply with the related extant instructions relating to imports including those on advance payment and a ceiling limit has been prescribed where third party payment for import transaction should not exceed USD 100,000. This limit will be revised as and when considered expedient.

Note: The above guidelines come into force with immediate effect, hence review the guidelines and ensure compliance to the above stipulated requirements whilst entering into third party settlements for exports / imports.

DisclaimerThis is not a legal opinion and should not be construed as one.  Please speak with your attorney for any advice.

Contact us for a Solution

Contact us for more information about our services and how we can help


As per the rules of the Bar Council of India, we are not permitted to advertise or solicit work. By accessing and browsing through this website, all users agree and acknowledge that the content of this website is for informational purposes only and that there has been no form of solicitation, advertisement or inducement by NovoJuris Legal or its members, in any form. No information provided on this website should be construed as legal advice and NovoJuris Legal shall not be liable for consequences of any action taken by relying on the information provided on this website.