This is the most frequent question I have to answer in my daily practices. Every person who is doing business with international partners (or just plans to do it) has to be aware of the following details: All the transactions that have an international financial importance for your country are being conducted according to Foreign Exchange Management Act (FEMA) from 1999, and the exchange control is regulated by the Reserve Bank of India (RBI) in concordance with this document. The Indian currency is fully convertible for trade, except of some specified restrictions. It can be exchanged at the one's ease for a foreign currency for the scope of organization of trade or current account transactions. RBI has a main role in the management of foreign currency and realizes exchange control, leaning on:
- Providing special or general permission that allows to implement transactions in foreign currency
- Specifying conditions for payment in respect of capital account transactions
- Regulating the transfer or issue of foreign securities to residents in India and Indian securities to non-residents
- The accounts of non-resident banks and rupee accounts of non-residents other than banks are also governed by the RBI.
Let me know if you have any questions regarding your specific situation (the currency you are going to work with).