Best Ways to Receive Export Payments for Leather and Footwear Exporters

A leather export payment usually reaches India as a bank wire (T/T) in the buyer's currency and lands in your account with an authorised dealer (AD) bank, the bank that handles your export paperwork. What changes is the term behind the wire: 1. an advance, 2. a letter of credit (LC), 3. documents against payment or acceptance (DP/DA), or 4. open account after shipment.

Many footwear and leather goods orders mix terms, with a deposit up front and the balance on shipping documents. Leather and footwear add three problems of their own: goods made to a buyer's labels are hard to resell, buyers deduct for quality claims, and a buying agent or sourcing office often pays instead of the buyer.

Pick the term that fits the buyer, set an advance that covers materials and take 60 to 90 days of credit with less risk. If a buyer short-pays over a quality claim, your bank can record it. Each shipment closes with the shipping bill, the bank's export tracking record (EDPMS), the inward remittance advice (FIRA) and the bank realisation certificate (eBRC), within the nine months RBI allows under FEMA 23(R)/2026-RB, in force from 1 October 2026.

No single term wins for every buyer. New buyers fit an advance or an LC, while brands and chain retailers usually insist on open account, so the right term for each leather export payment depends on who is paying and how well you know them. Each of these export payment methods carries a different cost and a different risk.

SBI figures shown are for customers without an export credit facility at SBI; export-credit customers often pay nil or a flat fee, and other AD banks set their own charges.

Use the buyer in front of you to pick the term:

• New brand or importer - Take part-advance or a confirmed LC on the first orders, and move to credit only once they have paid on time.
• Repeat importer - Part-advance with the balance on documents keeps orders moving, and a short open-account period can follow once the record is clean.
• Brand or chain retailer - Expect a request for 60 to 90 days on open account, and settle the deposit, the claim window and insurance before you agree.
• Buying agent or sourcing office - Confirm in writing who pays and in whose name, because your AD bank has to be satisfied that a third-party payer is genuine.

Our guide to export payment terms explains each term step by step, and DP and DA bills follow the bank process set out in export bill collection.

Made-to-order footwear and bags are the strongest case for a deposit. You buy leather, soles, trims and labels before the buyer pays anything, and goods carrying a buyer's label are hard to sell to someone else if the order is cancelled.

• Ask for a deposit that covers your materials - Many exporters ask for 30% to 50% when the order is confirmed and take the balance before shipment or against a copy of the shipping documents. The split is a commercial choice between you and the buyer, so it depends on how well you know them.
• Route the advance and the balance through one bank - RBI expects an advance and the later proceeds of that order to go through the same AD bank, unless you tell both banks you are moving the transaction.
• Know what happens if the order falls through - If no export takes place and the advance cannot be refunded, your bank may close the advance entry in EDPMS on your request once it is satisfied with your reasons. Raise it early rather than leaving the entry open.

Brands and chain retailers rarely change their terms, so the real question is how to accept open account without carrying all the risk yourself.

• Ask for part of the order up front - Even on credit terms, a deposit at order confirmation helps pay for leather and labour, so a cancelled order leaves you less out of pocket.
• Fix the payment trigger and the claim window in writing - Say whether the credit period starts at the bill of lading date, delivery or inspection sign-off, and how long the buyer has to raise a claim, so the clock cannot keep restarting.
• Check a new brand before the first shipment - Ask for trade references or a bank credit report, and if you plan to insure the order, apply for the ECGC credit limit on that buyer at the same time.
• Insure the credit risk with ECGC - ECGC's Shipments (Comprehensive Risks) policy, a form of export credit insurance, covers a buyer going insolvent, refusing to accept the goods or leaving an invoice unpaid four months after the due date. It protects you against that loss, but a claim comes after the wait, so it does not bring the money in any sooner.
• Pick the ECGC policy that fits your turnover - The Shipments (Comprehensive Risks) policy is for exporters with turnover above Rs5 crore, covers 90% and needs a credit limit approved on each buyer. Smaller exporters can use the Small Exporters Policy, for anticipated turnover up to Rs5 crore.
• Ask for a standby LC on large first orders - A standby letter of credit is a bank's promise to pay you if the buyer does not, so the order stays on open account with a bank behind it.
• Bridge the wait if cash is tight - Our guide to export finance companies compares ways to fund the gap while you wait for the buyer to pay.

Leather and footwear are judged by eye and by test report, so claims tend to turn on shade or colour, stitching, sizing, a failed lab test or late delivery. A claim then shows up as a short payment: the buyer pays the invoice less a deduction, or asks you for a credit note.

Here is how to limit the damage before and after a deduction:

• Agree inspection before the goods leave - Pre-shipment inspection by the buyer, their agent or a third-party inspector, signed off before the bill of lading date, narrows what can be claimed later.
• Write the claim rules into the contract - Set the claim window, the evidence needed (photos or a lab report), who does the testing, and whether deductions are capped.
• Get every deduction in writing - Ask the buyer for a debit note stating the amount and the reason, and issue your credit note against it, instead of accepting a reduced payment with no explanation.
• Ask your bank to record the lower amount - Your AD bank can allow a reduction in realisation, a record that you were paid less than the shipping bill value, once you give reasons and it is satisfied with them. For a shipping bill up to Rs10 lakh the bank can accept your own declaration; above that, keep the credit note, inspection report and emails ready.
• Do not let the deadline slide - The nine months run from the shipment date whether or not a claim is under discussion. If talks drag on, ask your bank for an extension before the period ends.

A T/T wire is a bank-to-bank transfer sent over SWIFT, the network banks use for cross-border payments, and what you fix before it is sent decides how much of the invoice reaches you.

• Bill in the buyer's own currency - Invoice EU buyers in euros, UK buyers in pounds and US buyers in dollars; dirhams, Canadian dollars and Australian dollars work the same way. If you invoice or settle in Indian rupees, your realisation window is 12 months instead of nine.
• Put the charge instruction on the invoice - OUR usually means the buyer pays every bank charge, SHA splits them and BEN puts them all on you. Without OUR, intermediary banks can take a cut on the way, which eats into a thin footwear margin.
• Clear a buying agent as payer first - When a buying agent, sourcing office or group company pays for the buyer, tell your AD bank before the money is sent; it can accept a third-party payment once it is satisfied the arrangement is genuine.
• Quote the right purpose code - Your bank asks for a purpose code on every receipt, so confirm the code with it before the buyer sends the wire.
• Set off only with your bank's approval - If you also buy components or finished leather from the same overseas buyer or its group, your bank may let you net what the buyer owes you against what you owe it, within the realisation period.

Small sample payments sometimes come through a cross-border payment platform instead of a direct wire. They are still export proceeds, so they still need matching to a shipping bill within the nine months.

Once the money lands, your bank still has to match it to a shipping bill, and all of it has to happen inside the nine months that run from the shipment date. After a leather or footwear shipment, the order is:

1. File the shipping bill, which is also your export declaration - Shipments from an EDI port need no separate export declaration form, because the shipping bill counts as one.
2. Your AD bank credits you and closes the EDPMS entry - Your bank checks the receipt, credits your account and closes or updates the matching entry in EDPMS, the system that tracks each export until it is paid. You do not close it yourself, and for a shipping bill up to Rs10 lakh the bank can close it on your declaration.
3. Tell the bank which shipping bills each wire settles - When one remittance covers several invoices or part-shipments, or arrives net of a credit note, say which shipping bills it settles so the entries close cleanly.
4. Collect your FIRA and raise your eBRC - Ask your bank for the FIRA, the foreign inward remittance advice that confirms the money arrived. Then self-certify your eBRC, the electronic bank realisation certificate, on the DGFT portal, linking each remittance your bank has reported to its shipping bill and invoice. The eBRC sits alongside EDPMS and does not replace it.
5. Stay inside nine months - Goods proceeds have to be realised and brought into India within nine months of the shipment date, or 12 months if you invoice or settle in rupees, under FEMA 23(R)/2026-RB in force from 1 October 2026. Your bank may extend the realisation period if you show a genuine reason. If the money is still unrealised a year after the due date, or after any extension, RBI then permits further shipments from you only against full advance or an irrevocable LC.

Xflow covers the wire side of two payment terms: the advance a buyer sends before you ship and the open account payment after delivery. For a leather or footwear exporter, that means the deposit that pays for your leather and the balance a brand pays on its credit terms can both come through us.

• Deposits and full advances - With Xflow receiving accounts, your buyer pays in USD, EUR, GBP, AED, CAD, AUD or another of 25+ currencies, and the money is settled to your Indian bank account as quickly as the next business day, depending on the payment method.
• Open account balances - When a brand or importer pays at the end of its 60 or 90 days, the money reaches your Indian account the same way.
• Paperwork for your bank - Each payout comes with an eFIRA within 24 hours at no extra cost, and rupee payouts come with a payment advice that helps your AD bank start closing the EDPMS entry where applicable. Your bank, not Xflow, closes it.

We do not handle letters of credit, documentary collections or export credit insurance, so for those you work with your bank and ECGC. We hold a final, fully approved Payment Aggregator Cross Border (PA-CB) authorisation from the Reserve Bank of India (RBI), as of February 2026.

Get your buyer's next advance into your Indian account, with an eFIRA within 24 hours at no extra cost. Sign up