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Sushil Kumar Bhatia (Advocate)     30 December 2008


            You have said that two indian companies executing a work in India and consideration in foreign currency reason not given,In my view consideration in foreign currency cannot be done without permission of RBI ,moreover, you can see the Indian Reserve Bank Act and Foreign Exchange Management Act for appropriate solution.

Manish Singh (Advocate)     30 December 2008

no , trnsaction by a rsident indian can be done in foreign currency except with general permission or specific permission of the RBI.

Manish Singh (Advocate)     30 December 2008

No. No trnsaction ,by a rsident indian, can be done in foreign currency except with general permission or specific permission of the RBI.

DD Sathe (Contract Management)     13 September 2009

Yes. It is quite possible e.g. as per policy of Govt. Of India in ICB (International competiitve bidding) tenders of company like ONGC, Indian bidders are permitted to quote in any currency and are paid accordingly at par with foreign bidders.


1 Like

Adv.Aiyer VLV (Proprietor)     14 September 2009


They can Very well do it.

an indian company could beone which has money in forex.

it can have its branch abroad which needs/carries-out the work.

the work itself may be done abroad.

Company paying must ensure it has dollars and it is within FEMA framework



N.Ramakrishnan (Advocate/ Senior Partner)     17 September 2009

Your query is ambiguous. You have not clarified whether one or both of the Indian Companies is/ are a branch or subsidiary of a Foreign Company. If this is the case, the branch / subsidiary of the foreign company can infact enter into a contract with another Indian company for the work to be executed in India and can pay in Foreign Currency since the same has been received by them as a remittance from their principal through authorised dealers.

If both the companies do not have a foreign connection, then it is fo you to clarify as to how they could lay hands on foreign currency to be paid in India. In such a case no transaction can be done in foreign currency.


Ramakrishnan, ADV

1 Like

DD Sathe (Contract Management)     08 October 2009

Foreign currency can be purchased through banks and licensed exchangers.

siddhartha shankar mishra (Lawyer)     19 March 2010

Your question must be specific. I agree with N> RAMAKRIHNAN

piyush sharma (Lawyer)     20 March 2010


I am of the view that two indian company can not make payment in cash for the worked done in India. The basic principle is that if that practices are permitted it will reduce the value of India currency. It is not only the company but even an individuals are not allowed to do that. Foriegners which come to india first has to purchased Indian currency and  then they can do transactions. However permission may be granted by RBI. 

DD Sathe (Contract Management)     20 March 2010

Rupee though not fully convertible has substantially become convertible and number of situations are covered where FE transactions can be done even by Indian companies-even if both are Indian without much formalities! If you visit aboroad you purchase say US Dollars from banks and money exchangers-here both you and bank can be very much Indian..Simple!

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