FX & Treasury in India — Move Money Confidently Across the Border
In most markets, treasury is about rates. In India, it is first about permission: every cross-border flow — capital, loans, royalties, dividends — has a FEMA pathway, a documentation standard, and a bank that must be satisfied before money moves.
A2 Consultants gives multinational treasurers a single India desk: structuring flows correctly, papering them completely, and unblocking the remittances that stall in banking channels.
The rupee is not freely convertible on the capital account, and that single fact shapes every treasury decision in India. Funding an entity, lending to it, charging it royalties, or extracting its profits are all regulated acts with prescribed routes, caps, and documentation. Banks — as authorised dealers — are the regime's front line, and they decline transactions whose paperwork is incomplete, without much appetite for debate.
Treasurers who internalise this operate smoothly: they choose instruments with the exit in mind, keep documentation bank-ready, and never discover a FEMA constraint at the moment of remittance. Treasurers who do not spend their India tenure escalating stuck payments. The difference is almost entirely preparation, and preparation is what we sell.
Who we serve
Group treasurers funding or repatriating from Indian entities; CFOs of Indian subsidiaries managing currency exposure; companies raising external commercial borrowings; and finance teams whose remittances — dividends, royalties, service fees — keep stalling in banking channels.
The outcomes we deliver
- Profit repatriation executed predictably — dividends, buybacks, royalties, and service fees weighed for tax and FEMA efficiency.
- Funding structured on the right instrument: equity, ECB, or intercompany terms that survive RBI scrutiny.
- Currency exposure managed under a board-approved hedging policy sized to your actual risk.
- Stalled remittances released through complete documentation and effective AD-bank liaison.
- Bank relationships that work: AD-bank queries anticipated and pre-answered, so transactions clear on first submission rather than third.
How we work
- Map. Every existing and planned cross-border flow catalogued against its FEMA pathway.
- Structure. Funding mix, repatriation strategy, and hedging framework designed together — not in silos.
- Execute. Filings (ECB returns, ODI/FDI reporting) and bank documentation handled end to end.
- Monitor. Periodic FEMA health checks and treasury reviews as regulation and rates move.
Why A2 Consultants
We sit at the intersection of FEMA, tax, and banking practice — which is where most cross-border payment failures actually occur. Our tax and FEMA teams review every flow together — a repatriation route is only recommended after its withholding, treaty, and documentation costs are known.
Frequently asked questions
What is the most efficient way to repatriate profits from India?
There is no universal answer — dividends are simple but suffer withholding tax reducible under treaties; share buybacks are taxed in the shareholder's hands under current rules and suit episodic returns of surplus; royalties and service fees are deductible in India but must survive transfer pricing and withholding scrutiny. The efficient answer depends on your treaty position, the entity's reserves, and future funding needs. We model the net-of-tax outcome of each route before recommending one.
Can our Indian subsidiary borrow from the parent company?
Yes, through the External Commercial Borrowings framework — subject to eligible-borrower and recognised-lender tests, all-in cost ceilings, minimum average maturity, and end-use restrictions, with a Loan Registration Number obtained before drawdown and monthly ECB-2 returns thereafter. Intercompany loans outside this framework are FEMA contraventions, not informalities. Where ECB conditions don't fit, alternatives — equity, CCDs, standby structures — usually can.
Are Indian subsidiaries allowed to hedge currency risk?
Yes — Indian entities may hedge underlying exposures through forwards, options, and swaps with authorised dealer banks, and the framework has been progressively simplified. What regulators and auditors expect is discipline: hedges tied to demonstrable exposures under a board-approved policy. We help subsidiaries size actual exposure, draft the policy, and select instruments — so hedging reduces risk rather than merely creating derivative positions to explain.
Why do our remittances from India keep getting delayed by the bank?
Because AD banks carry regulatory liability for the transactions they process, and they decline or query anything incomplete: missing Form 15CA/CB certificates, agreements that don't match invoices, withholding positions they cannot verify, or purpose codes that don't fit the documentation. The fix is systemic, not transactional — remittance packs built to bank standard, recurring flows pre-agreed with the bank, and tax certificates commissioned before, not after, the payment run.
Dividends stuck, ECB reporting overdue, or funding round imminent? Have our treasury desk review your flows.