How to Transfer Money from USA to an Indian Business Account: All You Need to Know

International money transfers come in many forms. Transferring funds from the USA to an Indian business bank account is one of them. It can get complicated if you don’t know what you’re doing. This article explains how compliance requirements, currency exchange rates, and international banking protocols affect the process.

Some key takeaways:

• The Reserve Bank of India (RBI) regulates all foreign exchange transactions in India using rules established by the Foreign Exchange Management Act (FEMA).
• The Financial Crimes Enforcement Network (FinCen) monitors cross-border payments originating in or directed to the United States.
• US banks usually charge $15 to $50 for outgoing international wires, while Indian banks may charge receiving fees of up to $25. Exchange rate markups can add another 2-4% to those costs.

An expanding global economy and recent innovations in banking technology have increased the frequency of cross-border payments, but that doesn’t mean they’re simple. India’s foreign exchange regulations are strict, and the United States has extensive reporting requirements for international transfers. You’ll need to understand both for a business account transfer.

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How to Send Money to an Indian Business Account from USA: Traditional Banking Methods

Most international money transfers from the USA to India go through the SWIFT network. SWIFT is widely considered one of the safest ways to move money, but it’s not necessarily the fastest. The process usually takes anywhere from one to five days, depending on the countries and time zones. That could be a problem if your business is time-sensitive.

Another drawback with international wire transfers is the cost. US banks usually charge $15 to $50 for outgoing international wires, while Indian banks may charge receiving fees of up to $25. Exchange rate markups can add another 2-4% to those costs. It can get expensive quickly. The larger the transfer, the more these fees will affect your bottom line..

Correspondent banking relationships can affect transfer speed and cost. For instance, major US banks like JPMorgan Chase, Bank of America, and Wells Fargo have established relationships with Indian banks like ICICI, HDFC, and State Bank of India. These relationships can expedite transfers and reduce intermediary bank fees, but only if you’re an account holder.

Digital Transfer Services for Sending Money to an Indian Business Account

Making an international money transfer today is not as difficult as it was just a few short years ago. Companies like Wise (formerly Wise), Remitly, and Western Union offer competitive exchange rates and lower fees than traditional banks. These platforms are popular with small and medium-sized businesses that have high transaction volumes.

Digital transfer services focus on emerging markets and offer competitive rates for India transfers, including express and economy transfer options. Their platforms include features like recurring transfers and multiple recipient management. Those are nice, but the markup on the exchange rate can eliminate much of the cost savings those features offer.

Wise stands out in this space because it uses a peer-to-peer model that provides the mid-market exchange rate (the same one you'll see on Google) with transparent fees. Their business accounts support BatchTransfers and provide detailed reporting for accounting purposes.

Cryptocurrency and Blockchain Solutions

Cryptocurrency transfers are an emerging option for international business payments, but there’s still significant regulatory uncertainty in certain countries. The United States treats cryptocurrency as property for tax purposes. India doesn’t have a stance. Crypto is not illegal there, but it’s also not regulated. That makes it risky for money transfers.

Many countries, including the United States, have begun to build a regulatory framework to govern the use and value of cryptocurrencies and stablecoins. Think of that as the “cutting edge” of the technology. India is on the other end of the spectrum. They acknowledge the existence of crypto assets, but they haven’t integrated them into their economy.

Despite the current drawbacks and red flags, cryptocurrency transfers are an option to keep an eye on. For example, blockchain-based services like Ripple's ODL (On-Demand Liquidity) partner with financial institutions to enable faster cross-border payments. These solutions can reduce settlement times from days to minutes, though adoption is still limited.

What Regulatory Requirements Are There for Moving Money from the the USA to an Indian Business Account?

The Reserve Bank of India (RBI) regulates all foreign exchange transactions in India. Their Foreign Exchange Management Act (FEMA) outlines proper documentation, purpose codes, and adherence to sectoral caps. Violating its rules can result in penalties or the freezing of transferred funds until the violations are resolved and all penalties are paid.

International money transfers originating in the United States are subject to regulations outlined in the Bank Secrecy Act (BSA).2 It requires that financial institutions report transfers over $3,000. An additional reporting requirement, mandated by the Currency Transaction Report (CTR) system, kicks in if the transaction exceeds $10,000.

Expect your bank to ask for the purpose of the transfer, beneficiary details, and supporting documentation. The Financial Crimes Enforcement Network (FinCen) monitors cross-border payments for money laundering activity, so don’t expect USA to India remittance to be simple.3 Many eyes are watching when money moves across international borders.

Documentation and Compliance

Documentation is part of every banking transaction, domestic or international. Indian businesses receiving foreign payments must provide specific documentation to their banks. For instance, FEMA regulations require a declaration form that states the purpose of the transfer. The bank confirms that with a purpose code based on the type of transaction.

Companies doing high-volume international money transfers should familiarize themselves with common purpose codes like P0102 (payment for imports) and S0101 (export proceeds). Technology firms might also see P0711 (software development). Using the correct codes is essential because it can affect regulatory compliance and processing times.

Another cost to be on the lookout for is the Goods and Services Tax (GST) charged on service exports from India. Your company may need to file specific returns or obtain tax clearances before taking delivery in this category. If you need help with this, consult with an Indian tax advisor to avoid compliance issues due to non-payment of taxes.

Banking Relationships and Account Setup

Establishing relationships with banks in both countries can streamline future transfers. Many Indian banks have US branches or representative offices that can facilitate transactions. ICICI Bank has branches in major US cities, while HDFC Bank maintains representative offices. Depending on your industry, you may already be familiar with these.

Business bank account requirements in India are similar to what you see in the United States. Most require company registration documents, business purpose verification, and identification of authorized signatories. US companies doing business in India may also need a Certificate of Incorporation and Certificate of Good Standing from their home state.

Some banks offer dedicated NRI (Non-Resident Indian) or foreign company services with specialized relationship managers. These services can provide better exchange rates, reduced fees, and expedited processing for regular customers. Building these relationships takes time, but it pays dividends if you plan to do frequent transfers.

Technology and Security Considerations

Cybersecurity should always be at the forefront whenever electronic transactions are being done. Both US and Indian financial institutions employ multi-factor authentication, encryption, and fraud monitoring systems, but private companies should employ their own. For instance, API integration reduces manual errors and provides better tracking capabilities.

Save Money on USD to INR Transfers With Wise Business

Breaking down the costs of past international money transfers can help you plan future cross-border payments. The transfer fees are only one component of that. US banks might charge up to $50 for an outgoing wire transfer, and Indian banks could charge a receiving fee of up to $25. Those fees may or may not include mark-ups on the exchange rate.

Tax liability should also be a consideration when planning your wire transfers. Currency gains and losses affect your earnings, so work with your accountant to optimize the timing of your transfers and their effect on your financial reporting. Some companies establish foreign exchange policies to standardize their approach.

Transferring money from the USA to Indian business accounts requires careful attention to regulatory requirements, cost considerations, and operational efficiency. While traditional banking remains reliable, digital alternatives like Wise offer compelling advantages.

Get a Wise Business account 100% online

Wise is not a bank, but a Money Services Business (MSB) provider and a smart alternative to banks. The Wise Business account is designed with international business in mind, and makes it easy to send, hold, and manage business funds in 40+ currencies. You can get major currency account details for a one-off fee to receive overseas payments like a local. You can also send money to 140+ countries.

	Editor & Business Expert:
	Panna is an expert in US business finance, covering topics from invoicing to international expansion. She creates guides and reviews to help businesses save time and make informed decisions. You can read more useful business articles on her author profile.

	Author:
	Kevin D. Flynn is a retired financial professional, business coach, and financial writer. He lives in Leominster, Massachusetts with his wife Evelyn, two cats, and ten wonderful grandchildren. When he’s not working, you’ll find him at the golf course or on his back porch reading classic sci-fi novels.

Sources:

1. fema.rbi.org.in
2. Bank Secrecy Act (BSA) | OCC
3. FinCEN