Inward Flow of Foreign Currency in India

Inward circulation of forex to a home country is also known as Inward remittance. In easy term it indicates the cash exchange from one country to other country. The country which receives the cash for them it is an Inward Remittance and the country which deliver the cash to other country for them it is External Forex.

Inward remittance is the process through which a foreign bank or the organization transfers the fund to the domestic bank account in the home country. Generally the NRI provide money-back to house which are gained by them outside Indian to back up their loved ones. Some send for the business and investment purpose also. But the past records is the evidence that 65% of the total remittance to India is for the family support considering the remit 2 India exchange rate.

According to the World Bank study reports says, India receives the highest amount of inward remittances in the world. In the year 2012, it was $69 billion from the global remittances of $ 514 billion as per the report. After India it is China who receives the inward remittances of around $ 60 billion in the year 2012.

 

Inflow of remittance is been doubled to developing countries since after the year 2000. In the year 2000, the inward remittances of whole world was $ 132 and in the year 2012 it was $514 as per the report of World Bank study. In India remittances is done by different methods like some do via Bank wire transfer means funds are transferred from one bank to another by electronic medium, Bank Money Orders (Postal order), Foreign Currency Cheques (NRI just has to write a cheque and send it to the recipient), Foreign Currency Drafts (ordinary bank draft), Remittance Cards (reload-able debit card), Direct Deposit / ACH Transfer, NRI Bank Accounts. Among above NRI Bank an account is the easiest and convenient method to use as per remit 2 India exchange rate.

Next question which may come in our mind is that "Will be there any limit for inward remittance to India??" As per the FEMA Act, there is no restriction or limit for sending money to India for family support. You can transfer the funds either to your own account or to those of your relatives account without obtaining any Foreign Inward Remittance Certificate (FIRC). In situation, remittance to India for business purposes then you need to provide FIRC for getting tax concession and necessary for the organization who is include is trade organization. The government of India can cross question you anytime if there feel any suspicious in the payment. So it is always best to complete the objective of exchange clearly. The transfer is for business purposes then do not forgets to keep the invoices ready.

Before remittance to India, always keep in mind that if the funds are huge then you may come under the scrutiny of Income Tax Department so always prepare yourself for the questions. In case you want to give a loan in foreign currency to any of your relative or friend in India then the maximum limit is $250000. You cannot give loan more than $250000 to any of your relative or your close friend. And the loan should be zero interest.