Merchanting Trade Transactions: RBI Evidence and Risk Checklist
Merchanting trade is not normal import/export accounting because goods may not enter India while payment and trade documents still pass through India. Bank evidence and timing controls are critical.
For broader context, see the NRI, RBI and International Transactions Hub.
Merchanting trade file
| Component | Evidence |
|---|---|
| Purchase contract | Foreign supplier terms and goods details. |
| Sale contract | Foreign buyer terms and pricing. |
| Shipping documents | Movement from supplier country to buyer country. |
| Payment legs | Outward and inward remittance mapping. |
| Margin and timing | Commercial margin and regulatory timing review. |
For the connected rule, example or next step, see Export of Services Realisation: RBI Evidence Checklist.
Controls
- Do not classify merchanting trade as ordinary import/export automatically.
- Maintain separate transaction folder for each deal.
- Coordinate with AD bank before execution.
- Match inward and outward legs carefully.
- Document cancellations or disputes separately.
For the connected rule, example or next step, see Export Write-Off and Extension of Realisation Period: RBI Evidence Checklist.
Finin2min warning
Official sources used
This article is intentionally source-limited to official RBI / India Code material. Verify final filing positions with the latest FEMA Act, regulations, RBI directions, bank instructions and portal advisories before publishing.
- India Code: Foreign Exchange Management Act, 1999 official record
- RBI: Master Circular on Export of Goods and Services
- RBI: Master Circular on Import of Goods and Services
FAQs
Goods may move between two foreign countries while Indian entity handles trade/payment legs.
AD bank review is important for documentation and payment routing.
Purchase/sale contracts, shipment records and payment mapping.
Source and review trail
Use the current official instrument, portal or regulator publication before acting. This panel separates the category authority from page-specific references.
- Primary category
- FEMA & International Tax
- Official starting point
- www.rbi.org.in