How to Send Money Abroad from India: Methods, Limits & Documentation

India's outward remittance was worth USD 29.56 billion in FY25. 

You'd expect, at this point, sending money abroad should be as seamless as sending a UPI transaction. But no, you're given papers to sign, compliance checklists to navigate, and deadlines.

What's worse? The average international wire transfer eats up as much as  5% in fees and markups. Most of it is hidden in "exchange rates" you never agreed to.

In this blog, we'll cover the basics of how to transfer money abroad from India, including costs, duration, and key RBI/FEMA regulations to be aware of, so you can skip the stress.

RBI and FEMA rules mandate that every transaction has a well-defined purpose. Most transfers usually fall under these:

• Education
• Family support
• Medical treatment
• Travel
• Investments
• Gifts and donations
• Business transactions

You've got several options to send money abroad from India, ranging from traditional bank methods to modern fintech platforms. 

Bank wire transfers (SWIFT)

How it works:

A wire transfer from a bank is ordered over the SWIFT network, the international messaging network connecting banks across the world. You give your bank the beneficiary's SWIFT/BIC code (or IBAN code in some parts of the world), bank name, and account number. The transfer is securely transferred from your bank to the beneficiary bank via intermediary banks if required. 

Time taken: 

1-3 business days, depending on the country you're sending the money to and the number of intermediary banks. 

Best for: 

Big, secure one-time or regular payments such as tuition fees, property, or overseas business settlements.

Pros:

• Universally recognized and secure.
• Works for high-value transactions.
• Direct credit to the recipient's account.

Cons:

• Those hidden 'exchange rate' fees we mentioned earlier? Wire transfers are where they quietly pile up.
• Transfer charges can be high, especially with intermediary banks. 
• Slower compared to modern digital remittance platforms.

Bank-specific online platforms (RemitNow, Money2World, etc.)

How it works:

Numerous Indian banks today operate their own branded international money transfer services, such as RemitNow (HDFC), Money2World (ICICI). You log in through net banking or app, provide the recipient's information, and the bank transfers the money overseas under RBI's Liberalized Remittance Scheme (LRS). The money is credited to the recipient's foreign bank account.

Time taken: 

Typically 1-3 business days, depending on the destination and correspondent banking network of the bank.

Best for:

• Tuition fee payments.
• Family maintenance transfers.
• Outward regular remittances, where you'd want a secure banking channel.

Pros:

• End-to-end digital (no branch visit required).
• Supported by your bank for compliance with FEMA guidelines.
• Built into your bank account for convenient payments.
• Usually faster than demand drafts.

Cons:

• Fees and exchange markups can still be more than fintech options.
• Available only if you're a customer of that specific bank.
• Less flexible than standalone fintech platforms.

Fintech platforms

How it works:

With services like Wise (formerly TransferWise), overseas money transfers have become a breeze. You link your payment method, provide the payment details for your recipient, and enter the amount to be sent. The facility then handles the rest of the process, including instructions on converting and transferring. 

Time taken: 

In some instances, the transfer is instantaneous; otherwise, it takes up to one working day, depending on the country and payment method selected.

Best for: 

Entrepreneurs, freelancers, and small-scale businesses that need low charges and transparent cross-rates for foreign exchange-related services.

Pros:

• Competitive exchange rates with minimal or transparent fees.
• Faster compared to usual bank transfers in most instances.
• No branch trips needed.
• End-to-end tracking of your transfer.

Cons:

• Might have transfer caps on each transaction or daily.
• All fintechs do not support all countries or currencies.
• Larger, high-value transfers might still be better done through banks for regulatory and compliance purposes.

Online bank transfers via NetBanking

How it works:

A few banks (such as SBI, Axis, Kotak, HDFC) enable outward remittances through direct NetBanking. You type in your credentials, select the "Outward Remittance" option, enter beneficiary information (including NEFT, SWIFT, IBAN codes), and complete the transfer. The bank transfers the payment via its international correspondent banks.

Time taken: 

1-3 business days.

Best for:

• Customers who prefer to send money abroad without intermediating platforms.
• Direct transfers of tuition, medical, or family-related expenses from their account.

Pros:

• Familiar internet banking environment.
• Fully compliant with RBI and FEMA regulations.
• Often integrated with online document upload (no need for physical submission in some cases).

Cons:

• Fees and exchange rates vary by bank and are not always transparent.
• Requires net banking registration.
• It can still be slower and more expensive than fintech solutions.

Foreign Currency Demand Drafts (FC DD)

How it works:

A Foreign Currency Demand Draft or FC DD is a draft that is issued by a bank in the foreign currency you decide. You place an order for the draft with your bank, pay the sum in INR along with a fee, and the bank gives you a draft that the recipient can deposit in their foreign bank account. This guarantees the reception of the funds in the desired currency without further conversion on the recipient's end.

Time taken: 

Usually 7–15 business days, including clearing and courier time.

Best for:

• Foreign university tuition fee payments.
• Property transactions or investment abroad.
• Other formal or official payment that calls for a physical instrument.

Pros:

• Traceable and secure.
• RBI Liberalized Remittance Scheme (LRS) and FEMA-compliant.
• The recipient receives foreign currency cash, saving conversion woes.
• Paid by educational institutions, government agencies, and other formal organizations.

Cons:

• Slower than online banking or fintech apps.
• Courier fee and processing time contribute to the total lag.
• Not suitable for frequent or timely transfers.

Money Transfer Operators (MTOs)

How it works:

MoneyGram, Western Union, and other money transfer operators are most well-known for remittances. Outward remittances are available, but subject only to very tight RBI LRS caps. You can request them online, through their app, or through an in-country agent, and the recipient receives the money at a cooperating branch overseas.

Time taken: 

A few minutes to 1 business day for online or cash pickups; a little longer when applying bank deposits via the MTO.

Best for: 

Quick, low-value transfers when the recipient prefers to receive cash or simply doesn't have a bank account.

Pros:

• Fast transfers are often available within minutes.
• Wide coverage across the world with physical agent points.
• Convenience to those without bank accounts.

Cons:

• A higher price and poorer exchange rates than fintech platforms.
• Typically not appropriate for large-value transfers.
• Minimal transparency on markups and intermediary fees.

Money order (India Post)

How it works:

India Post provides you with an international money order to send money overseas. You go to a post office, complete the necessary forms, and provide the recipient's information and country of destination. The money is remitted through the post service and credited to the local bank of the recipient or disbursed at a correspondent office in some countries.

But this is hardly ever used nowadays for outward remittances. In the era of SWIFT transactions and fintech apps, it's all but obsolete except in very unique situations.

Time taken: 

Normally, 5-15 working days, depending on the destination and postal clearance.

Best for:

• Smaller transfers to countries supported by India Post.
• Situations where the recipient may not have easy access to banks or digital channels.

Pros:

• Available in remote parts of India.
• Easy and familiar procedure for users with confidence in postal services.
• No bank account in India is necessary to send (cash payments are acceptable).

Cons:

• Much slower than digital or bank-based transfers.
• Country coverage is limited.
• Low limits per transaction.
• Less convenient than contemporary online alternatives.

When it comes to regulating outward remittances, the RBI's Liberalized Remittance Scheme (LRS) sets annual limits, while FEMA rules define what's allowed or prohibited.

We'll look at them in detail: 

RBI Liberalized Remittance Scheme (LRS) 

Here are some key points you'll need to know about RBI's LRS:

1. Yearly limit: USD 250,000 per individual in a single financial year (April-March).
2. Eligible: Resident persons only.
3. Not eligible: Corporations, partnership firms, trusts, and HUFs.
4. Uses: Education, foreign travel, medical care, upkeep of relatives, gifts/donations, investments (shares, property), and foreign business expenses (if sent separately).
5. Restricted: Margin trading, remittances, winning payouts from lotteries, prohibited items, or purchases of Foreign Currency Convertible Bonds (FCCBs) issued by Indian companies.

Example of limits by category:

• Education abroad: Total cost within the USD 250,000 cap.
• Medical treatment abroad: Cost permitted up to the cap. In case of emergencies, additional money might be permitted with RBI permission.
• Emigration: Total cost up to USD 250,000 per year.
• Gifts and donations: Within the overall cap.

If your need is above the cap, you'll need special permission from the RBI.

FEMA guidelines for outward remittances

FEMA classifies outward transfers into two buckets: Current Account and Capital Account transactions.

1.Current account transactions (for personal and routine purposes):

• Education: Tuition and living costs overseas
• Medical treatment: Bill for hospital or treatment outside the country
• Travel: Business or personal travel
• Family: Maintenance of relatives abroad
• Gifts and donations: Remittance to loved ones or charities

2.Capital account transactions (for investments and business):

• Investments overseas: Purchase of property or shares abroad
• Loans and borrowings: Borrowing or lending to parties outside India
• Guarantees and collateral: Giving guarantees or pledges to involve foreign parties

(May require prior RBI approval depending on purpose and amount)

Prohibited uses under FEMA:

• Margin stock trading or speculative foreign stock trading
• Lottery tickets, wagering, or gaming
• Investments in prohibited or illegal products
• Buying specific foreign bonds, such as Foreign Currency Convertible Bonds (FCCBs), issued by Indian entities
• Genuine transaction contravening Indian law or international sanctions

All outward remittances have to adhere to RBI and FEMA guidelines. The documents may differ based on the reason for the transfer, but typically comprise basic identity documents, Form A2, purpose-specific documents, and additional declarations.

1.Basic documents

• Valid passport copy of the sender.
• PAN (Permanent Account Number).
• Aadhaar (sometimes required for verification).
• Bank account details and KYC compliance.

2.Form A2 (Mandatory)

Form A2 is a declaration form filed with the authorized dealer (bank/forex provider) for each remittance. It is an acknowledgment of the purpose of the transfer and FEMA compliance.

3.Purpose-specific documents

• Education: University admission letter, fee structure, and a passport copy of the student.
• Medical treatment: Estimate of treatment cost, medical reports, and hospital letter.
• Emigration: Visa/immigration papers, emigration clearance copy.
• Travel: Air tickets, travel itinerary (at times).
• Investment abroad: Supporting documents for the investment (e.g., share purchase agreement, property details).

4.Additional declarations

Some banks or providers may ask for:

• Source of funds declaration.
• FEMA declaration.
• LRS utilization certificate (if you've already made transfers in the same financial year).

When evaluating how to transfer money abroad from India online, don't just look at upfront fees. Consider hidden costs like foreign exchange markups and transfer fees as well.

1.Transfer fees

Indian banks typically have INR 500-1,500 as their transaction fee; fintechs could be lower but charge service fees.

2.Foreign exchange markups

Banks apply a 1-3% addition above the mid-market rate. For a USD 10,000 transfer, that means an additional INR 8,000-24,000 lost.

3.Intermediary bank charges

In SWIFT transactions, 2-3 correspondent banks can each charge USD 15-30 before the recipient receives the money.

4.GST and TCS (Tax Collected at Source) 

18% GST is charged on bank charges; TCS of 5%-20% comes into play over INR 7 lakh a year, based on the purpose (education, investment, foreign travel, etc.).

Here are the steps to remit money from India to overseas:

1.Select the mode

Choose from online remittance, bank drafts and wire transfers, as per your requirement.

2.Check the limit

Check that your transfer falls within the LRS limit of USD 250,000 per financial year.

3.Collect documents

Keep your PAN, passport, and documents as per specific requirements.

4.Fill up Form A2

Declare the purpose of remittance.

5.Initiate transfer 

Online or at the bank, submit documents and pay in INR.

6.Funds remitted

The authorized dealer will convert INR to the foreign currency and forward it to the beneficiary through the selected channel.

7.Confirmation

You get a transaction receipt or SWIFT copy for records.

Now that you understand the methods, the next step is to ensure you don't lose your money while doing so. Some smart steps, like comparing exchange rates, checking processing fees, planning ahead, etc., can make your remittances easier and cheaper.

1. Compare exchange rates: A small variation in the rate can affect big transactions.
2. Look at processing fees: Banks and fintech operators have varying fees and margin spreads.
3. Plan ahead: Don't keep your transfers till the last moment, which could prove to be more expensive and time-consuming.
4. Monitor your LRS use: Record the amount remitted in the financial year to remain within restrictions.

We’ve been talking about sending money abroad from India. But what if you’re on the other side of the equation? India tops the list with USD 129.1 billion in inward remittances, and problems like delays and transaction fees are still common.

Not with Xflow. 

Instead of worrying about hidden fees, delays, or complicated compliance, Xflow helps you:

• Get paid directly into your Indian bank account without opening costly foreign currency accounts.
• Know exactly what you’re getting with transparent exchange rates based on the mid-market rate.
• Access funds faster, with settlements in 24 hours, unlike traditional routes that can take weeks.
• Stay worry-free on compliance, since all transfers are fully RBI and FEMA approved.
• Accept payments in multiple currencies like USD, EUR, GBP, and more, so global clients can pay in their preferred currency.
• Work the way you do. Xflow is built for exporters, service firms, and freelancers who need a simple way to collect international payments.

Keep more of what you earn. Open your Xflow account and cut out hidden fees.