Can a third party pay your export invoice under RBI rules?

Your client is a London startup, but the money arrives from its Delaware parent. A Middle East distributor pays on behalf of the end customer. A university's sponsor pays an Indian tutor's invoice. In each case the payer is not the party you billed. Under the Foreign Exchange Management Act, 1999 (FEMA), that is a third-party receipt, and it needs your bank's comfort.¹

What is a third-party payment for an export under regulation 8?

A third-party payment for an export is a receipt from someone other than the exporter and the importer, such as the client's parent company or a payment agent, and regulation 8 of the 2026 Regulations lets your bank permit it.¹

Regulation 8 of the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (the 2026 Regulations) says an Authorised Dealer (AD) bank may permit third-party receipts and payments for export and import transactions, meaning receipts from or payments to parties other than those undertaking the export and import, provided the bank is satisfied with the bona fides of the transactions.¹

• Start date: the 2026 Regulations apply from 1 October 2026.¹
• Test: genuineness, judged by the bank.¹

That is the whole rule. It gives the bank discretion and puts the test on genuineness.¹

Which third-party payers can a bank accept for a service export?

A bank can accept any third-party payer for a service export if it is satisfied with the bona fides, so the evidence needed depends on how the payer is linked to the client.¹

The examples show common cases; your bank decides each one on its facts.¹

How do you get your bank to accept a third-party receipt?

You get your bank to accept a third-party receipt by giving it evidence of why someone other than the client is paying, since the 2026 Regulations leave the evidence to the bank.¹ Banks commonly ask for:

1. Show who the client is: the contract or invoice.
2. Explain why someone else is paying: a group chart, a payment instruction from the client, an agency agreement, or the third party named on the invoice.
3. Provide KYC on the payer: Know Your Customer (KYC) information about the payer if it is unusual.
4. Confirm sanctions status: confirm that the payer is not in a sanctioned country. See payments from sanctioned countries.

Circular No. 20 also directs banks to report any doubtful transaction to the Directorate of Enforcement.² See AML checks on international payments.

What documents and deadlines apply to a third-party export receipt?

A third-party export receipt follows the same Export Declaration Form and realisation deadlines as any service export: realisation within nine months from the invoice date, or twelve months for rupee exports.¹

Naming the expected payer on the invoice, or adding a line such as "payment will be made by [parent company name] on behalf of the client", gives the bank the evidence it needs. See EDF for service exporters and the export invoice format.

What happens if a third party pays late or the bank refuses the receipt?

If a third party pays late or short, the exporter remains responsible, because regulation 5 requires "the exporter" to realise and repatriate the full export value within nine months from the invoice date for services (twelve months for rupee exports), whoever the payer is.¹

• Late or short payment: the usual tools apply, an extension under regulation 5 or a reduction under regulation 6.¹ See extension of export realisation period.
• Bank refusal: ask for the reasons and for the bank's escalation route. Regulation 19(2) requires each bank's policy to include a grievance escalation process and an appeal handled at a higher internal level, which decides on the genuineness of your submissions.¹
• No acceptance: if the payment cannot be accepted, the client may need to pay from its own account instead.

Speak to the bank before the payment is sent, especially for large or recurring amounts.

Which RBI rules govern third-party payments for exports?

Regulation 8 of the 2026 Regulations governs third-party payments for exports from 1 October 2026, and A.P. (DIR Series) Circular No. 20 superseded the old Master Direction and the third-party circulars of November 2013 and February 2014 from that date.¹²

Under the Master Direction, as it stood until 30 September 2026, third-party payments were allowed subject to these conditions:³

The table compares the old Master Direction text with regulations 4, 5 and 8.¹³ Paragraph B.8 of the old Master Direction also required realisation from a third party to be "duly declared" in the declaration form.³ The 2015 Regulations referred to advance payment from "a buyer / third party named in the export declaration".⁴ The 2026 Regulations do not carry over either wording.¹ Banks can still ask for these under their own procedures: SBI's customer guide for the 2026 rules asks for a tripartite agreement or other proof and for the third party to be shown in the EDF.⁵

What are the common mistakes with third-party export payments?

The most common mistake is accepting money from an unexplained payer and leaving the bank to work out why, when regulation 8 turns on the bank being satisfied with the bona fides.¹

• Assuming the payer is responsible: the exporter must realise the full value whoever pays.¹
• Assuming no paperwork is needed: banks such as SBI still ask for a tripartite agreement or other proof.⁵
• Ignoring sanctions: a payer in a sanctioned country can stop the receipt.
• Assuming GST changes with the payer: the GST export conditions look at the recipient, the place of supply and the currency of payment. See GST on export of services for the conditions, and ask your adviser if the payer is in India.

Third-party receipts depend on your bank's view of each case, so speak to the bank before the payment is sent.