How to Pay International Vendors From India: Options, Steps and Paperwork

To pay international vendors from India, you go through your authorised dealer (AD) bank, which is a bank licensed by the Reserve Bank of India (RBI) to handle foreign exchange.

You can send a SWIFT wire from the branch or online, pay by business card, or use a payment platform. Every bank route starts with the vendor invoice.

Whichever route you choose, a few rules apply to every payment. Your bank asks for Form A2 and a purpose code each time.

Form 145 and Form 146 replaced Form 15CA and 15CB from 1 April 2026. Tax deducted at source (TDS) may be due, while GST reverse charge usually applies to imported services.

The steps below suit companies, partnerships and sole owners paying for software, services or goods from abroad.

Personal routes such as UPI, Google Pay or the individual remittance scheme do not cover a company invoice, so you need one of the business routes instead.

Most companies use one of five routes to make an international payment from India, and the right one depends on what you buy, how often and how much.

The wider set of trade options, such as letters of credit, sits under methods of payment in international trade. For a vendor invoice, compare the routes below.

A wire through your bank is the default for imported goods because the bank also updates its import records. The mechanics of a SWIFT wire transfer, including timing and intermediary banks, are worth reading before your first one.

For a ranked list of providers, see our guide to cross-border payments.

When a company card works and when a bank wire is safer

Cards suit small, frequent online bills, while a wire suits anything you need a paper trail for.

Under the RBI e-mandate framework of 21 April 2026, a recurring card charge needs extra authentication when you set it up and on the first debit.

Each recurring charge above ₹15,000 needs it again, so a renewal can fail when nobody is there to approve it.

• Choose a card: use it when the bill is small, the vendor only takes cards at checkout, and your issuer allows the spend abroad.
• Choose a wire: use it when you pay for goods, the invoice is large, or your CA needs Form 145 and bank advice on file.
• Choose a platform: use it when you pay many vendors in several currencies each month and want one place to track them.

Can you pay an overseas supplier by UPI or Google Pay?

No, not for a business invoice. UPI abroad is built for Indian travellers who scan a QR code to pay at merchants in partner countries, not for settling a vendor invoice.

If you need to clear a supplier invoice, you have to use your bank, a company card or a licensed provider.

Those routes produce the papers your CA and auditor will ask for later, such as Form A2, the bank advice and the purpose code, which a QR payment at a shop never gives you.

Does LRS apply when a company pays an overseas vendor?

No. The Liberalised Remittance Scheme (LRS) is for resident individuals, and the RBI states that it is not available to corporates, partnership firms, HUFs or trusts.

A company pays its vendors through its AD bank on the business routes above, with the invoice and forms in the company name.

A founder who pays a company bill from a personal account under LRS leaves the company without proof of the payment.

If that has already happened, ask your CA how to record it and move future bills to a company route. If you are paying personally, the limits and rules sit under the liberalised remittance scheme.

The bank route follows the same order every time, whether you pay an agency in the US or a parts maker in Germany.

Gather the papers first, because a missing document stops the payment at the bank, even with foreign vendors you have paid before. The seven steps below cover both goods and services.

1. Get the invoice and bank details: Ask the vendor for a final invoice in their currency, plus their bank name, account number or IBAN, and SWIFT code. Your bank has to be satisfied the payment is genuine, so the invoice should match the contract.
2. Confirm what you are buying: Decide whether it is goods, a service or software, since this sets the purpose code, the tax treatment and whether your bank tracks it against a bill of entry.
3. Check the tax: Ask your CA whether the payment is taxable in India and whether TDS applies. If the vendor claims a tax treaty rate, collect their tax residency certificate (TRC) and a copy of their Form 41, which replaced Form 10F.
4. Agree the purpose code with your bank: Pick the RBI code that matches the payment, such as S0102 for settling an import invoice. Your bank confirms the final code, and you can check the list of purpose codes first.
5. File the forms: Sign Form A2, then file Form 145 on the income tax portal before the money leaves. Where Part C applies, your CA issues Form 146 first, and you give your bank the acknowledgements.
6. Send the payment and keep the advice: Submit at the branch or online. Keep the SWIFT message copy, usually called the MT103, because it proves when the money left and helps trace a delayed payment.
7. Book GST and close the file: For imported services, pay the GST due under reverse charge in your return and keep the invoice, forms and bank advice together. For goods, make sure your bank has closed the import entry.

Once this runs smoothly, the next problem is volume. Approvals, scheduling and tracking for many bills at once are covered under vendor payments, which helps when your finance team pays dozens of suppliers a month.

Your bank asks for a fixed set of papers, and most of them come from you, your CA or the vendor.

Form 145 and Form 146 are the new names, from 1 April 2026, for what used to be Form 15CA and 15CB.

Form 15CA and 15CB filed for remittances made before 31 March 2026 stay valid, provided the payment goes out on or before the date in the form.

Form 145 has four parts, and the right one depends on whether the payment is taxable. Part A covers taxable payments up to ₹5 lakh in a tax year, whether you count one payment or the year's total.

Part B is for larger taxable payments backed by a certificate from your tax officer. Part C needs a Form 146 from your CA, and Part D covers payments that are not taxable in India.

Two separate taxes can apply, and they work in opposite directions. GST is a tax you pay on top of the invoice, while TDS is tax you hold back from the amount you send.

Getting either wrong costs you money later, so check both before you pay, and ask your CA where the contract is unclear.

When an Indian business buys a service from a supplier outside India, you pay integrated GST yourself under reverse charge.

This comes from Notification 10/2017-Integrated Tax (Rate) of 28 June 2017. The rate is usually 18% for software and professional services, although it depends on the service heading.

You pay this tax in cash, not from your input tax credit balance, and report it in your GST return.

• Input credit: If you are registered and meet the conditions, you can usually claim the GST you paid as input tax credit, so check the timing with your CA.
• Related companies: The tax still applies when the service comes from your own overseas parent or group company, and you raise a self-invoice for it.
• Online services: A registered Indian business buying online services from an overseas supplier generally pays on reverse charge.

If the payment counts as taxable income in India for the vendor, you must deduct TDS before you pay. Whether it does depends on what you buy, the contract and the tax treaty.

In 2021, the Supreme Court held that payments for standard copies of software are not royalty, so some software bills may carry no TDS. Rates and treaty checks are covered in our guide to TDS on foreign payments.

Goods and services from overseas suppliers follow the same bank route, but goods carry an extra tracking step. The RBI rules for imports in force from 1 October 2026 set out how your bank checks each payment.

The main differences are below.

IDPMS stands for Import Data Processing and Monitoring System. When your bank debits your account for an import, it closes or updates the matching entry.

Where the bill of entry or invoice is up to ₹10 lakh (or its equivalent in foreign currency), your bank can close the entry on your own declaration that you have paid, which saves chasing papers for small shipments.

Timing and advances for imported goods have their own rules, so check these points before you agree payment terms with a supplier.

• When to pay: There is no fixed deadline under the Foreign Exchange Management Act (FEMA) for paying an import. You pay within the period in your contract, and your bank can extend it if you give reasons.
• Late interest: Any interest you pay a supplier on a late import bill must stay within the ceiling the RBI sets for trade credit.
• Advance payments: There is no fixed rupee or dollar cap on paying before the goods ship. Your bank may set its own thresholds and may ask for a standby letter of credit or a guarantee above them.
• Same bank: Keep the advance and later payments with the same bank, unless you inform both banks before you switch.
• Goods that never arrive: You must bring the advance back to India. If you do not, or the entry stays open, your bank will want a guarantee before any future advance.

Advances for gold or silver imports are not allowed at all, so those deals need payment after the goods arrive.

The invoice amount is rarely the whole cost. A bank wire carries a bank fee, a SWIFT message fee, an exchange margin and sometimes intermediary bank deductions.

Two state-owned banks list their corporate charges, so the figures below are real examples.

On a ₹5,00,000 wire, the Indian Overseas Bank commission works out at ₹375 plus the ₹500 SWIFT fee.

At Bank of Baroda, where the exchange benefit applies, the commission is ₹500, which is the minimum, plus ₹500 for SWIFT. Your exchange margin and any GST on the fee sit on top of both.

Intermediary banks can reduce what your vendor receives, which then looks like an underpayment. Ask your bank whether you can pay all charges yourself or share them with the vendor.

Individuals sending money abroad also face tax collected at source, which is explained under TCS on foreign remittance.

Software bills are a common source of failed payments, because one company card often carries a dozen subscriptions. Each one renews on a different date, and any recurring charge above ₹15,000 needs a fresh approval.

When an approval is missed, the tool may pause and your team loses access until someone fixes the card.

Paying each tool by wire instead means a separate set of forms and a SWIFT fee for every small bill, which rarely makes sense for a monthly subscription.

Why a dedicated card suits recurring software bills

A dedicated prefunded card is built to reduce the payment failures that come with domestic cards on recurring charges. You fund it once with one transfer, and every tool charges the same balance.

You also stop sending a separate wire, with its own forms and fees, for each small bill. The route only fits software subscriptions, never goods or general services, so your bank stays the route for everything else.

Before you choose one, check which countries the card covers, how you fund it, what it charges, and whether your CA gets the papers needed for tax and audit.

How our virtual card works for your software tools

With the Xflow virtual card, we give you a prefunded USD card for SaaS vendors based in the US, UK, Canada and the EU. You top it up with a single SWIFT, NEFT or RTGS transfer, then enter the card on each vendor's billing page.

You do not need new vendor accounts.

• Setup time: Activation takes one business day, and you can create a separate card for each department to keep spending under control.
• Balance alerts: We send a reminder when the balance falls below a limit you set, such as USD 100, so a renewal does not fail.
• One payment for many tools: Your business makes one outward payment to us instead of one per vendor, which removes the need to prepare a Form 145 for each underlying vendor payment. References to Form 145 describe the product's intended operational model and do not constitute tax or legal advice.
• Fees: We are currently offering a 0.5% processing fee.
• Tax papers: You can download tax documents such as a no permanent establishment (PE) declaration and a TRC for your CA if required.

What the card does not cover

We allow SaaS purchases only, and the card is not a general way to pay every supplier abroad. If you pay a vendor for goods, consulting or anything that is not software, use your bank route.

Support questions about a tool stay with that tool's vendor, while you see all SaaS spend in one place. You can see how the Xflow virtual card works and check whether your tools qualify.

Most stuck payments to international suppliers come from a few avoidable errors, and each one is cheap to prevent. These are the ones that hold up a payment at the bank or cause trouble at audit.

Most of them happen when a rule written for one kind of payment is applied to another.

Check which rule fits your payment before the money leaves your account, and ask your bank or CA when the invoice could be read two ways.

Sending money before the purpose code and invoice match

If the invoice describes a software licence and the code says consultancy, your bank may hold the payment or ask for a revised form. That delay often lands close to the due date, when the vendor is already chasing you.

Agree the code with your bank before you file Form A2, and keep the wording on the invoice consistent with it.

If a vendor sends one invoice covering both a licence and setup work, ask them to split it, so each part carries the code that fits.

Applying the export realisation rule to imports

Two different rules are often confused, and only one of them applies when you are the payer.

Skipping the GST reverse charge and TDS check

Both taxes are easy to miss when the vendor invoice shows no Indian tax at all, which is normal for a supplier abroad.

• GST: Leaving reverse charge out of your return creates a liability later, plus interest, even though you could usually have claimed the credit.
• TDS: Paying the full amount when TDS was due makes you liable for the tax you did not deduct.
• Records: Keep the Form 145, the invoice and your GST return entry together, so an audit question takes minutes to answer.

Using a SaaS card for purchases that are not SaaS

A dedicated SaaS card is built for software subscriptions only. Using it for hardware, freelance work or travel means the payment can be refused, and your papers will not match the purchase when your CA reviews the books.

Keep those payments on your bank route, where the purpose code and forms fit what you bought.

A simple rule for your team helps here: software subscriptions go on the card, while everything else goes through the bank with an invoice and Form A2.