Best Ways to Receive Export Payments for Apparel and Textile Exporters

Garment exporters receive payment from overseas buyers through one of four routes: 1. money in advance, 2. a letter of credit (LC), 3. documents against payment or acceptance (DP/DA), or 4. open account after shipment.

In practice the money usually arrives as a bank wire, often called a T/T, in the buyer's currency into your authorised dealer (AD) bank account in India.

How garment exporters receive payment in practice comes down to the term you agree with the buyer, which sets both your risk and your cost.

Large retail and brand buyers often ask for 60 days or longer on open account, while a new buyer can usually be asked for part-advance or an LC instead.

This guide sets those terms out from safest to riskiest for you, shows which one suits which kind of buyer, and explains how the wire actually reaches your account.

It then walks through what must happen after the money lands, including closing the entry in the Export Data Processing and Monitoring System (EDPMS), getting your electronic bank realisation certificate (eBRC) or foreign inward remittance advice (FIRA), and meeting the nine-month realisation deadline.

Most apparel and textile exporters get paid through the same four payment terms, listed here from safest to riskiest for you.

• Cash in advance - The buyer wires all or part of the money before you ship, so you carry no payment risk; it is the safest term and common with new or untested apparel buyers. For the full mechanics of each option, see our guide to export payment terms.
• Letter of credit (LC) - The buyer's bank promises to pay once you present shipping documents that match the credit, which shifts most of the risk onto a bank rather than the buyer.
• Documents against payment or acceptance (DP/DA) - Your bank releases the shipping documents to the buyer only on payment (DP) or on a signed promise to pay later (DA), a middle path on risk.
• Open account - You ship first and the buyer pays 30, 60 or 90 days later, which is common with large retailers and carries only wire charges, but it leaves you most exposed.

However the term is set, the money moves the same way.

A telegraphic transfer or SWIFT wire travels from the buyer's bank into your AD bank in India, in USD, GBP, EUR or AED. (Consignment, where the buyer pays only after the goods sell, is a rare side case rather than a fifth term.) These are the export payment methods most garment exporters use.

Each term carries a different cost and a different risk, and that decides which buyer it suits.

Here is how they compare on how you get paid, your risk, the typical Indian bank charge, who each suits and the wait for your cash.

Charges are illustrative, for a bank's non-export-credit customers; export-credit customers often pay nil or a flat fee, and other AD banks differ.

Which term to take depends on the buyer:

• New buyer - Ask for part-advance or a confirmed LC until they have proved they pay on time.
• Repeat buyer - Open account on a short tenor, or part-advance, keeps the relationship easy without full exposure.
• Big retailer or brand - Open account is simply the norm here, so manage the risk rather than fight it.
• Buyer's agent or sourcing house - A third party can pay, but your bank has to clear it first.

The documentary route (DP and DA) has its own rules and costs, which our export bill collection guide covers in full.

Large retail and brand buyers rarely move on terms. They often want 60 days or longer, sometimes up to 120. What matters is saying yes to open account without carrying all of the risk yourself.

• Ask for part-advance before production - A share paid upfront helps cover your fabric and making costs, so a cancelled or delayed order does not sink the whole run.
• Fix the payment trigger in the contract - Agree in writing whether the credit clock starts at dispatch, delivery or inspection, and spell out any deductions or chargebacks, so a buyer cannot quietly stretch the term.
• Check the buyer before you ship - A quick trade reference or credit check on a new retail buyer costs far less than chasing an unpaid invoice across borders later.
• Consider export credit insurance - ECGC offers export credit insurance that can protect you if an overseas buyer fails to pay, and it is worth pricing before you take on a large open-account order.
• Use finance to bridge the gap - If waiting 60 days or longer strains your cash flow, export factoring can advance funds against the invoice; our guide to export finance companies compares the options.

One more reason to get this right: if proceeds stay unrealised for more than a year past the due date, RBI rules let you make further exports only against full advance or an irrevocable LC.

Once the term is agreed, a T/T wire is how the money actually lands. A T/T is a telegraphic transfer sent bank to bank over SWIFT, from the buyer's bank to your AD bank.

• Bill in the buyer's own currency - Invoicing in USD, GBP, EUR or AED is usually simpler for everyone; if you invoice or settle in INR instead, your realisation window is 12 months rather than nine.
• Decide who pays the wire charges - State OUR (the buyer pays all charges), SHA (charges are shared) or BEN (you pay them) on the invoice or contract. Otherwise intermediary bank deductions can shrink the amount that reaches you.
• Confirm who is actually paying - If a buyer's agent or sourcing house pays instead of the buyer, your AD bank can accept that third-party payment only once it is satisfied the arrangement is genuine, so agree it in advance.
• Give the right purpose code - Your bank needs a purpose code for the receipt: advance receipts against an export contract use one code, and bills sent on collection use another. Your AD bank confirms which applies.

You can also set off what an overseas buyer owes you against what you owe the same buyer or its group, within the realisation period, if your AD bank agrees.

Some exporters receive smaller orders through payment gateways or collection platforms instead of a direct wire, though the banking and compliance steps stay the same.

Receiving the money is only half the job. You also have to close the paperwork that proves the proceeds came in, and the clock on that is tight. Here is what happens after a garment shipment is paid.

1. The shipping bill carries your export declaration - When you ship from an EDI port, your export declaration is treated as submitted as part of the shipping bill, so there is no separate form to file.
2. Your AD bank credits you and updates EDPMS - When the wire arrives, your bank checks the receipt is genuine, credits your account, and then closes or updates the matching entry in EDPMS. You do not close it yourself; the bank does (see what is EDPMS).
3. Small shipments close on a declaration - Where a shipping bill is up to Rs10 lakh or equivalent, the entry can be closed on your own declaration that the payment has been realised, which saves paperwork on low-value orders.
4. Collect your eBRC and FIRA - Ask your bank for the FIRA confirming the inward remittance and keep it, then raise your eBRC, the self-certified bank realisation certificate on the DGFT portal, which draws on your bank's remittance messages and is separate from EDPMS.
5. Meet the nine-month deadline - Under FEMA, you must realise and repatriate the proceeds within nine months of the shipment date for goods, or 12 months if invoiced or settled in INR; your bank may extend the realisation period on request if you show a genuine reason.

Whatever the term, textile exporters need two things at the end: the wire received cleanly and paperwork that matches it. Xflow covers that part for the two wire-based terms above.

• Payments before shipment - Receive an advance, in part or in full, before you ship, in USD, GBP, EUR, AED or another currency, straight into your Indian bank account as quickly as the next business day.
• Open-account payments after shipment - Collect what the buyer owes once the goods have gone, in those same currencies, with the proceeds settled to the same account as quickly as the next business day.

For each payout we issue an eFIRA, the electronic foreign inward remittance advice, plus a payment advice that helps your AD bank begin closing the EDPMS entry where applicable; your bank, not us, closes it.

We do not handle letters of credit or documentary collections, so for those you use your bank.

Xflow Payments India Pvt. Ltd. holds final Payment Aggregator Cross Border (PA-CB) authorisation from the Reserve Bank of India (RBI), as of February 2026.

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