Export receivables must normally be realised within nine months of shipment under FEMA, with extensions and write-offs permitted through the authorised dealer bank within limits. Recovery from a foreign buyer depends on the contract's governing law and forum, any arbitration clause, the buyer's assets and whether it has an Indian subsidiary or agent. FundRaksha sends the formal demand, structures the claim, handles any Indian entity directly and coordinates foreign counsel where needed, on a case-by-case fee basis agreed upfront.
First, the regulatory side
Every export is reported through the shipping bill and the EDPMS system at your bank. Proceeds must normally be realised within nine months. If the buyer has not paid by then, you must apply through your authorised dealer bank for an extension, with reasons. If the money will never come, write-off is permitted: self write-off within a percentage of the year's export proceeds, and larger write-offs with the bank's or RBI's approval, subject to conditions such as surrendering export incentives on that shipment. Ignoring this creates a compliance problem on top of a bad debt.
FundRaksha's advice covers this sequence so that your recovery effort and your bank reporting are consistent: the demand letters and legal steps become the evidence that supports an extension or a write-off.
Routes to recovery, honestly assessed
| Situation | Route | Realistic view |
|---|---|---|
| Buyer has an Indian subsidiary, branch or agent that signed or guaranteed | Indian notice, suit or arbitration against that entity | Strong; FundRaksha handles directly |
| Contract has an arbitration clause (ICC, SIAC, LCIA or ad hoc) | Invoke arbitration; enforce award in the buyer's country under the New York Convention | Good for larger claims; cost must be weighed |
| Contract governed by Indian law, Indian courts | Indian suit; decree enforced abroad only in reciprocating territories | Enforcement is the weak link |
| No contract, open account, buyer silent | Formal demand, trade body or embassy commercial wing intervention, local collection counsel | Depends on the country and the buyer |
| Buyer insolvent abroad | File claim in the foreign insolvency | Usually partial recovery |
The free consultation gives you this assessment for your specific buyer before you spend anything.
What FundRaksha does for exporters
- Free consultation: contract, proforma and commercial invoices, shipping documents, correspondence and the buyer's profile reviewed; recovery routes and FEMA position explained.
- Formal demand within 24 hours, addressed to the buyer and any Indian entity, structured to support both recovery and bank reporting.
- Direct recovery from the Indian subsidiary, agent or guarantor where one exists, using the standard FundRaksha Legal process.
- For arbitration or foreign proceedings: claim structured by our advocate, foreign counsel identified and coordinated, costs estimated before you commit.
- Documentation for extension or write-off through your authorised dealer bank, if recovery is not viable.
Fees for export matters involving foreign proceedings are agreed case by case, because foreign counsel and institutional costs vary. Where an Indian entity is pursued, the standard 30% success fee applies with nothing upfront.
Prevent the next one
- Use a written contract with an arbitration clause at a neutral seat and a clear governing law.
- Insist on a letter of credit or at least a documentary collection for new buyers; open account only after a payment history.
- Insure receivables through ECGC or a private credit insurer; the premium is small against the exposure.
- Check the buyer's Indian affiliates on FundRaksha Trust and obtain a foreign credit report before extending credit.
- Act at 30 days overdue, not at nine months.
Export sectors and hubs
FundRaksha advises exporters in textile and garments, diamonds and jewellery, pharma, leather and engineering goods, from Surat, Tiruppur, Mumbai and other export centres. See the exports industry page. For domestic buyers, see invoice recovery. Book a free consultation with your documents; we will tell you plainly whether recovery is realistic.
Last reviewed: 2026-10-08. Information for Indian businesses; not legal advice.