A machinery manufacturer has an engineering firm in Pune design parts of a new product line. The invoice for 80,000 euros is due, and the firm wants to see rupees in its account. Between the payment order in Germany and the credit in India lie several banks, a currency exchange and two legal systems. These stations decide where the payment costs time and money. Three routes lead through them. A fourth, linking the payment systems of the two central banks, is planned for 2027.
Between Order and Credit
The usual cross-border transfer runs over SWIFT. The manufacturer's house bank passes the order on, usually through one or more correspondent banks that hold accounts for each other. With the order, the company decides who bears the charges, using the codes OUR, SHA or BEN. Somewhere along the way, euros are exchanged into rupees. Where that happens depends on the order and on the banks involved. That is also where the mark-up on the rate arises, the foreign exchange spread.
How long this takes is measured every year by the Financial Stability Board (FSB) for the G20. According to its report of 9 October 2025, more than 90 per cent of payments of 100,000 US dollars or more are credited worldwide within one business day. More than half are credited within an hour. The count is made by the region of the recipient, and South Asia lags behind. The FSB sees one key reason in capital controls on the receiving side. There, the recipient's bank checks the purpose of the payment and the documents for it. If something is missing, the credit is delayed by hours or days, according to the report.
For the corridor to India, this means that where a payment gets stuck, it is more likely at the credit in India than on the way through Europe. Indian foreign exchange law requires payments between India and other countries to run through a party that the Reserve Bank of India (RBI) has authorised for this purpose. That is an authorised bank or another authorised person. This is where the checks described by the FSB take place.
The report under the Foreign Trade and Payments Regulation
On the German side, the Foreign Trade and Payments Regulation (AWV) applies. Under section 67, the company itself reports payments to non-residents to the Deutsche Bundesbank, not its bank. Only payments above 50,000 euros are reported. Payments for the import or export of goods are exempt, services are not.
The 80,000 euros for the design work therefore have to be reported, while a delivery of goods of the same amount would not. The report is due by the seventh working day of the following month. Under section 67, the transfer of crypto-assets also counts as a payment. Anyone paying the engineering firm in a stablecoin would therefore have to report in the same way.
Three Routes and Where They End
Besides the bank, there are two other routes. Payment service providers with their own accounts in both countries take the euros in Europe and pay out the rupees from a balance in India. They balance their holdings between the two countries themselves. The third route is a stablecoin: the manufacturer buys tokens and transfers them, and the recipient exchanges them into rupees through a service provider.
| Bank via SWIFT | Provider with accounts in both countries | Stablecoin | |
|---|---|---|---|
| Who exchanges euros into rupees | one of the banks involved | the provider, at its own rate | the provider where the recipient redeems the tokens |
| What arrives in India | a credit through the engineering firm's bank | a credit from the provider's balance | tokens that still have to be exchanged |
| Where the route ends | at the check by the authorised bank | at the rules that apply to the provider in India | at Indian foreign exchange law |
For the stablecoin, the last row is decisive. The Indian rules provide for payments from abroad to come in through an authorised party. They do not provide for payment in crypto-assets. For the engineering firm, a stablecoin is therefore not an equivalent route. Whether it may accept one at all is something it has to clarify under Indian foreign exchange law. How stablecoins work economically is described in Stablecoins – Fundamentals.
What Could Change from 2027
The central banks are working on a different approach. They are linking their instant payment systems directly. On 19 November 2025, the ECB's Governing Council decided to start implementing a link between TIPS, the Eurosystem's instant payment system, and India's Unified Payments Interface (UPI). According to an ECB status report of 10 June 2026, a pilot is planned to go live in the first half of 2027.
The RBI names remittances between the euro area and India as the aim. The announcements do not say whether or when payments by companies will also run over this link. Even then, the checks under Indian foreign exchange law would remain.
What the Treasury Clarifies First
For a CFO, the effort in the India corridor depends less on the choice of bank than on the details that travel with the payment. Before paying, the manufacturer agrees with the engineering firm on the purpose of the payment and on the documents its bank wants to see. With its own bank, it clarifies who bears the charges and at what rate the currency is exchanged. A rate that is only fixed on execution means the total cost can only be estimated in advance.
Anyone comparing routes measures the same three figures over a few weeks: the time to credit in India, the total cost including the rate mark-up and the number of queries. The risk lies less in losing the money than in delay. A payment held up in India for lack of documents pushes back the next delivery. And a missed AWV report falls back on the company, not on the bank.
The Friction Sits with the Recipient
What makes this corridor slow lies largely in India, in the checks on purpose and documents. A faster route on the German side changes little. Whether bank, provider or stablecoin, in the end the money must come in through a party the RBI has authorised. The link between UPI and TIPS starts at a different point. It connects two systems run by the central banks themselves and leaves the checks where Indian law requires them.
Sources & Date
- •Federal Ministry of Justice (Germany) – Foreign Trade and Payments Regulation (AWV), section 67, reporting of payments – (German; also section 71(6), deadline; text read in October 2026)
- •Reserve Bank of India (RBI) – Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2023 (FEMA 14(R)/2023-RB) – (regulation 3(2); amended up to 12.02.2025)
- •Financial Stability Board (FSB) – G20 Roadmap for Enhancing Cross-border Payments: Consolidated progress report for 2025 – (09.10.2025)
- •European Central Bank (ECB) – Decisions taken by the Governing Council: Interlinking TIPS with UPI – (decision of 19.11.2025)
- •European Central Bank (ECB), TIPS Contact Group – Status update on cross-border – (PDF, 10.06.2026)
- •Reserve Bank of India (RBI) – Interlinking of Unified Payments Interface (UPI) with the TARGET Instant Payment Settlement (TIPS) of the Eurosystem – (21.11.2025)
As of: 04.10.2026