How Do Indian Exporters Receive Payments Through the Asian Clearing Union (ACU)?

The Asian Clearing Union payment mechanism is a clearing arrangement through which eligible trade payments between member countries are settled through ACU accounts that banks hold with correspondent banks in other participating countries (Circular No. 22 of 2020, para 4). FEMA gives 'ACU' the meaning in Article I of the ACU agreement (Explanation to Regulation 3(2)(I)).

• Members: The 2016 Manner of Receipt and Payment Regulations named Bangladesh, Myanmar, Pakistan, Sri Lanka, Maldives, Nepal, Bhutan and Iran as ACU members, alongside India (FEMA 14(R)/2016-RB, Regulation 3(1)(A)). Those regulations were replaced in 2023, and the current text does not list members, so confirm the current list with your AD bank.
• Units: The Asian Monetary Unit is denominated as ACU Dollar, ACU Euro and ACU Yen, equal in value to one US Dollar, one Euro and one Japanese Yen (A.P. (DIR Series) Circular No. 22 of 2020, para 1).
• Accounts: AD banks may open ACU Dollar, ACU Euro and ACU Japanese Yen accounts with correspondent banks in other participating countries, and all eligible payments are settled through these accounts (Circular No. 22 of 2020, para 4).
• Eligibility: Since the ACU Board's decision of 19 June 2013, only payments for export and import of goods and services among ACU countries are eligible for the ACU mechanism (A.P. (DIR Series) Circular No. 63 of 2013, para 2 and revised para 7).
• Euro: Operations in ACU Euro have been suspended since 1 July 2016, and eligible current account transactions in euro may be settled outside the ACU mechanism until further notice (A.P. (DIR Series) Circular No. 81 of 2016, para 2).
• Default: RBI has said that eligible export and import transactions with other ACU members shall be settled through the ACU mechanism, except where RBI has given a specific country exemption (A.P. (DIR Series) Circular No. 21 of 2015, para 4).

For a freelancer or exporter, the practical effect is that a payment from a client in some neighbouring countries may need to be denominated and routed differently from a payment from a client in the United States or Europe. The country exceptions below decide which route applies. For rupee trade outside the ACU, see Special Rupee Vostro Accounts, and for Nepal and Bhutan see Nepal and Bhutan payment rules.

The Asian Clearing Union payment rule applies to eligible trade payments from a buyer resident in an ACU member country other than Nepal and Bhutan. RBI has relaxed the rule for several members, so the route depends on the buyer's country, as the table shows.

An Asian Clearing Union export payment reaches the Indian exporter through bank accounts denominated in ACU units. Payment is made by debit to the ACU account in India of a bank from the buyer's country, or by credit to the Indian AD bank's ACU account with its correspondent bank in that country (Circular No. 21 of 2015, para 3).

1. Confirm with your AD bank that the buyer's country and the transaction are eligible for the ACU mechanism, and whether a country relaxation (Sri Lanka, Maldives, Myanmar, Iran) changes the route.
2. Denominate the contract and invoice in ACU Dollar where payment will come through the ACU (Foreign Trade Policy 2023, para 2.52(c)); ACU Yen is also available since 6 March 2020 (Circular No. 22 of 2020, para 3), while ACU Euro remains suspended.
3. For services, file the Export Declaration Form (EDF) within 30 days from the end of the month in which the invoice was raised; one EDF can cover all services exported in that month (Regulation 3(2) of the 2026 Regulations). For goods, the EDF is furnished at the time of export (Regulation 3(1)).
4. Share your AD bank's details with the buyer and ask the buyer to instruct its bank to pay through the ACU arrangement, quoting your invoice number.
5. Your AD bank credits your account only after it is satisfied the transaction is genuine, and closes or updates the EDPMS entry at the same time (Regulation 4(2) of the 2026 Regulations).
6. Realise the full export value within nine months of the invoice date (services) or shipment date (goods), or ask your AD bank for an extension with reasons (Regulation 5(1) of the 2026 Regulations).

An Indian exporter can use the ACU Dollar and the ACU Yen through the ACU mechanism, while the ACU Euro is suspended. Some member countries also allow settlement outside the ACU, as listed below.

If an Asian Clearing Union export payment is delayed or not realised, the general FEMA export rules apply; there is no separate ACU penalty. The key rule is realisation within nine months, or twelve months if invoiced or settled in rupees (Regulation 5(1)).

• Extension: Your AD bank may extend the realisation period if you give reasons for the delay and it is satisfied with them (Regulation 5(1), second proviso).
• Reduction: Your AD bank may allow a reduced export value; for invoices up to ₹10 lakh, a declaration from the exporter is enough (Regulation 6).
• Restriction: If proceeds stay unrealised for more than one year beyond the due date or extended date, further exports need full advance payment or an irrevocable letter of credit (Regulation 13).
• EDPMS: Invoices up to ₹10 lakh can be closed in EDPMS on the exporter's declaration, individually or in a quarterly bulk declaration (Regulation 4(2), proviso).
• Routing: If a payment from an ACU member does not follow the route RBI allows for that country, ask your AD bank how it will treat the receipt. Confirming the route before invoicing avoids this.

Ask your AD bank in writing for an extension or a reduction before the realisation period ends, keep the buyer's correspondence and SWIFT or ACU payment advice, and file any missing EDF. See export realisation period and export proceeds not realised.

Asian Clearing Union export payments are governed by Regulation 3 of the Manner of Receipt and Payment Regulations, 2023 and a series of RBI ACU circulars, read with trade policy and the 2026 export regulations. The table lists each rule in date order.

• Euro invoices: Quoting ACU Euro on an invoice. ACU Euro operations have been suspended since 1 July 2016, so agree ACU Dollar or ACU Yen, or a currency allowed outside the ACU.
• Nepal routing: Expecting a Nepal or Bhutan buyer to pay through the ACU. Trade with Nepal and Bhutan follows separate rupee rules under Regulation 3(2)(I)(a)(i).
• Sri Lanka: Assuming a Sri Lankan client must pay through the ACU. Since July 2022, Sri Lanka trade may be settled in any permitted currency outside the ACU.
• Old sources: Relying on the old Master Direction on Export of Goods and Services. It was superseded on 1 October 2026; the ACU rules now sit in the 2023 regulations and the separate ACU circulars.
• Rupee vostro: Assuming ordinary rupee vostro realisation works for ACU buyers. Trade policy excludes vostro accounts of banks in ACU member countries from that route (FTP 2023, para 2.52(b)).
• Late EDF: Forgetting the EDF for services because the client is in a neighbouring country. The 30 day EDF rule applies to every export of services.

Every rule, deadline and form on this page is linked to its official source, checked on the dates below.

1. Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2023 (FEMA 14(R)/2023-RB, amended up to 12 February 2025), Regulation 3(2)(I)(a)(i) to (iii) and the Explanation defining ACU (checked 8 Oct 2026)
2. Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2016 (FEMA 14(R)/2016-RB, superseded), Regulation 3(1)(A) listing ACU members (checked 8 Oct 2026)
3. RBI A.P. (DIR Series) Circular No. 22, Settlement system under ACU Mechanism, 17 March 2020, Paras 1, 3, 4 and 6 (checked 8 Oct 2026)
4. RBI A.P. (DIR Series) Circular No. 81, Settlement System under ACU, 30 June 2016, Para 2 (checked 8 Oct 2026)
5. RBI A.P. (DIR Series) Circular No. 43, Settlement system under ACU Mechanism, 26 December 2008, Paras 2 and 3 (checked 8 Oct 2026)
6. RBI A.P. (DIR Series) Circular No. 63, Memorandum of Procedure for channeling transactions through ACU, 18 October 2013, Para 2 and Annex, revised paras 7 and 8(b) (checked 8 Oct 2026)
7. RBI A.P. (DIR Series) Circular No. 21, Memorandum of Procedure for channeling transactions through ACU, 8 October 2015, Paras 2 to 4 (checked 8 Oct 2026)
8. RBI A.P. (DIR Series) Circular No. 31, Asian Clearing Union (ACU) Mechanism: Indo-Iran trade, 27 December 2010, Para 2 (checked 8 Oct 2026)
9. RBI A.P. (DIR Series) Circular No. 09, ACU Mechanism: Indo-Sri Lanka trade, 8 July 2022, Para 2 (checked 8 Oct 2026)
10. RBI A.P. (DIR Series) Circular No. 22, ACU Mechanism: Indo-Maldives trade, 17 March 2025, Para 2 (checked 8 Oct 2026)
11. Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (FEMA 23(R)/2026-RB, amended up to 22 September 2026), Regulations 3, 4, 5, 6, 13 and 18(2) (checked 8 Oct 2026)
12. RBI A.P. (DIR Series) Circular No. 20, Export and Import of Goods and Services, 16 January 2026, Para 4 and Annex of superseded circulars (checked 8 Oct 2026)
13. Foreign Trade Policy 2023, Chapter 2 (DGFT), Para 2.52(b) and (c) (checked 8 Oct 2026)