How to pay for an international medicine order: wire transfer and letters of credit

Paying for an international medicine order looks simple until the first wire arrives short, a letter of credit cannot be honoured because one document is impossible to produce, or a well-meaning donor pays from an account nobody declared. Medicines are also a restricted category for most card processors, so bank transfers carry most of the trade.

This guide explains the payment methods buyers meet when sourcing from India, how to make a wire transfer safely, how letters of credit work for medicines, and the Indian foreign exchange rules that shape payment terms. It is general information, not banking or legal advice.

Common payment methods

Card payments are uncommon because processors restrict prescription medicines. Stripe's restricted business list, for example, includes online pharmacies and card-not-present prescription products, and card networks treat pharmacy merchants as high risk. Exporters that serve hospitals and importers therefore rely mainly on bank transfers.

Paying by wire transfer

A SWIFT wire from the buyer's bank to the exporter's bank in India is the default route. The steps below avoid the most common problems.

1. Check the proforma invoice. It should show the exporter's legal name and address, the bank name, account number and SWIFT code, the currency, the Incoterm, the payment terms, the validity and an invoice number.
2. Verify the bank details independently. The account should be in the exporter's own legal name with a bank in India. Confirm the details by phone on a number already on file, especially if they arrive by email or change between invoices.
3. Choose the charge option. With OUR the sender pays all charges, with SHA each side pays its own bank's charges and with BEN the beneficiary bears them. If the invoice must be received in full, choose OUR or agree how intermediary charges will be handled.
4. Quote the invoice number. Put the proforma number in the payment reference so the exporter's bank can match the funds.
5. Send the payment advice. Forward the bank's payment confirmation and, if available, the SWIFT tracking reference to the exporter.
6. Allow time for crediting. Under the FEMA rules, the exporter's bank credits export receipts only after checking that the transaction is genuine and updating its export records, so there can be a short gap between the funds arriving and the exporter confirming receipt.

Why named-patient orders are paid in advance

A named-patient order is sourced for one patient under an approval that names the consignee and often the quantity. If the order is cancelled, the product usually cannot be resold to another buyer, and for products made under a CDSCO export NOC the manufacturer undertakes not to divert the quantity to the Indian market. Full advance payment is therefore common for these orders and for first orders from a new buyer. The named-patient supply guide explains the route itself.

Letters of credit

A letter of credit, or documentary credit, is a bank's undertaking to pay the exporter when it presents documents that comply with the credit's terms. Most credits are issued subject to the ICC's Uniform Customs and Practice for Documentary Credits, UCP 600, in force since 2007. The ICC's eUCP version 2.1 supplements it for electronic presentation.

Under UCP 600 a credit is irrevocable, banks examine documents on their face, and each bank has up to five banking days after presentation to decide whether the documents comply. Unless the credit says otherwise, original transport documents must be presented within 21 calendar days after shipment and before the credit expires.

Drafting a credit that works for medicines

Most problems with letters of credit for medicines come from terms that cannot be met. Before the credit is issued, agree the draft with the exporter.

• Ask only for documents the exporter can produce. A credit that requires a document only the destination regulator issues, or a certificate in a format the manufacturer does not use, will fail at presentation.
• Match names to the permit. The consignee on the credit, the invoice and the import permit should be identical.
• Allow enough time. The latest shipment date and expiry should cover sourcing, any export NOC, the destination permit and flight availability. The lead time estimator helps size this.
• State shelf-life and temperature terms clearly. If the credit asks for a minimum remaining shelf life or a temperature record, say exactly which document shows it.
• Choose the Incoterm deliberately. Insurance documents are only needed when the seller arranges insurance, as under CIP. See the Incoterms guide.

A documentary collection under the ICC's URC 522 rules, supplemented by eURC, is a lighter alternative, but the banks do not undertake to pay.

Indian foreign exchange rules that affect terms

The realisation period

The Reserve Bank of India notified the Foreign Exchange Management (Export and Import of Goods and Services) Regulations 2026 on 13 January 2026, effective 1 October 2026. As first notified, they gave 15 months to realise export proceeds for goods, or 18 months for rupee invoices. An amendment dated 22 September 2026, also effective 1 October 2026, cut these to nine months from shipment, or twelve months where the export is invoiced or settled in rupees. The bank can extend the period in permitted cases.

Sources tell the earlier history differently. Some describe an extension to 15 months in November 2025 and a restoration to 9 months in 2026 under the older 2015 regulations. The current text on the RBI website gives nine and twelve months, but the exporter's bank should confirm the period for each shipment. In practice, credit terms longer than the realisation period are hard for an Indian exporter to accept without the bank's agreement.

Advance payments and third-party payers

An exporter that receives an advance must route the advance and the later export proceeds through the same authorised dealer bank, under regulation 10 of the 2026 regulations, and the bank's own policy governs advance terms. Payments from a third party, such as an NGO paying for a ministry or a family paying for a hospital, are allowed if the bank accepts them, but the exporter must declare the third party's name, address and relationship in the export declaration form. Tell the exporter who will pay before the money is sent.

Currency

Invoices are usually in US dollars, euros or pounds, and sometimes in UAE dirhams or Indian rupees. A rupee invoice gives the exporter a longer realisation period, but the buyer then carries the exchange rate risk. Agree the currency on the proforma invoice and pay in that currency.

Refunds and cancellations

Agree the refund policy before payment. A refund normally goes back through the same banking channel to the original payer. If the product has already been sourced or made for the order, the exporter may not be able to refund in full, which is another reason to fix the specification, quantity and consignee before paying. When everything is ready, a request can be started through the request a quote page, and the landed cost calculator estimates the full cost on arrival.