The real cost of cross-border payments for Indian exporters

When Nakul, a young entrepreneur from Jaipur, received his first international order for handcrafted home décor from a buyer in the U.S., he was thrilled. He worked tirelessly to ensure on-time delivery, tracking every stage of the shipment. But the real struggle began after the shipment, when it came to receiving the payment.

The payment took nearly two weeks to arrive. When it did, Nakul was puzzled to find the amount credited to his Indian bank account was far less than what the buyer had transferred. He then spent another two weeks navigating bank processes to generate something called an eBRC, a document required for export compliance.

Unfortunately, Nakul’s story is not unique. For thousands of small and mid-sized exporters across India, getting paid is often the most complicated part of doing business globally. The payment came. But not all of it.

For Nakul, it was a rude shock. The buyer had paid in full, so why did the credited amount feel short? Turns out, this isn’t a glitch. It’s the norm.

The hidden frictions that hurt MSMEs

What first-time exporters often don’t realise is that cross-border payments come with a web of hidden fees and inefficiencies that quietly eat into their margins.

Let’s break that down:

●    Wire transfer fees: Every time a buyer sends money via SWIFT, their bank levies a SWIFT fee, which can range between $20 and $75, and in most cases, the fee is passed on to the exporter. 

●    Poor exchange rates: This is where exporters lose most of their money. Banks rarely give the rate you see on Google. They add a markup, sometimes as high as 2–5%. So while the market rate might be Rs 84 per dollar, your bank quietly offers Rs 83. That’s a Rs 10,000 hit on a $10,000 payment for no added service. Banks often negotiate exchange rates with exporters that bring in a high volume of monthly payments; however, small businesses mostly don’t get that leverage.

●    Intermediary bank cuts: International SWIFT transfers often pass through multiple intermediary banks, each taking $10 to $30 before passing it on. (Source: Winvesta)

●    Receiving bank deductions: Some Indian banks also charge for simply crediting the money. Then there are the costs of compliance paperwork; FIRA, eBRC and while they aren’t a lot, it's easy to understand how they can add up.

The silent cost of waiting

Beyond fees, delays are another hidden cost. Payments can take 3 to 7 days to arrive, sometimes even longer, with no clear visibility on where the money is. Banks say it's “processing,” buyers insist they’ve paid, and the exporter is left refreshing their portal in frustration. Add to that the chase for FIRA or eBRC, which can drag on for another week or two.

It’s a black box and the impact is immediate. And it affects everything, cash flow, trust, the next shipment. Small exporters, especially in textiles, agri, and handicrafts, often pay upfront for materials and labour. So when payments are delayed or come up short, everything else stalls, namely, salaries, production, and even new orders.

Most MSMEs are already on thin margins, and with payment cycles stretching up to 90–120 days, many end up taking loans just to stay afloat. So, it's not that they’re short on orders; they’re in fact short on access to their own money.

A better way to get paid

For years, small exporters just accepted that this is how international payments work: slow, expensive, and opaque. But that’s changing.

New-age fintech platforms are redesigning how money moves across borders. Instead of relying on the traditional SWIFT route, many platforms now offer virtual foreign bank accounts in USD, EUR, and more, linked to your name. 

That means a buyer in the US can pay via ACH, just like they would with a local vendor, and the funds are automatically converted and settled in the exporter’s Indian bank account, fully compliant with RBI regulations. Some platforms even go a step further with direct integrations to global marketplaces, so if you're selling on Amazon or Etsy, the payments come in directly, without any manual follow-ups.

For exporters, this shift can be significant. You get better exchange rates, faster settlements, and complete visibility into where your money is and how much you will actually receive. Compliance docs like FIRA are generated automatically, cutting down the paperwork and back-and-forth with your bank.

More importantly, it gives you back control. You can plan your cash flow better, take on more orders without buffer delays, and focus on growth instead of chasing payments. Traditional banks are trying to catch up, but fintech platforms are already solving what’s held exporters back for years.

The road to $2 T runs via payments

India has set an ambitious goal: reaching $2 trillion in exports by 2030. But that journey doesn’t just depend on production capacity or global trade agreements. It hinges on how easily our exporters can get paid.

Today, India’s merchandise exports are valued at around $437 billion, with nearly 45% coming from MSMEs. Yet, if small exporters are still losing money to poor FX rates, waiting weeks for settlement, or struggling with post-payment paperwork, we are building friction into the very system we want to scale.

These inefficiencies not only affect margins. They limit reinvestment, delay hiring, and deter new entrepreneurs from going global. For a country betting big on self-reliance and export-led growth, this is a foundational bottleneck.

The good news is that momentum is building. Fintech innovation is filling the gaps that banks left unaddressed. Policymakers are exploring UPI-linked international corridors, and discussions around digitized compliance are gaining traction.

But to reach $2 trillion, we must act with urgency. Fixing trade logistics and financing is important, but we must also fix the backend of payments. Because an exporter who gets paid faster, more transparently, and in full, is an exporter who grows.

Srivatsan Sridhar, Co-founder and CEO, Skydo, a cross-border payments platform