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The purpose codes are issued by the Reserve Bank of India (RBI) to specify the nature of foreign currency transactions. For Indian businesses, receiving payments from foreign customers is an inward remittance, and sending payments abroad for goods or services is an outward remittance.
  • Each payment must be tagged with an appropriate purpose code, with separate codes for import and export transactions.
  • Export purpose codes begin with ‘P’, while import purpose codes start with ‘S’.
Watch Out!It is mandatory to add the purpose codes during international payment enablement. Failure to do so will result in compliance issues and delays in transactions.

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Select Correct Purpose Code

You must select the correct purpose code to avoid issues related to regulation compliance. For example, a software development startup in India exporting software to the United States should choose the appropriate purpose code, such as “P0802 - Software consultancy/implementation” when receiving payments. This ensures that the RBI and banks understand the exact nature of the transaction and aids in compliance with Indian regulations. To select the correct purpose code, make sure to:
  • Check RBI Purpose code list: Refer to RBI’s comprehensive list of purpose codes and their corresponding descriptions to choose the correct purpose code. You can check with your bank for the purpose code list.
  • Engage with Chartered Accountants (CAs): CAs can assist in identifying the correct purpose code for your specific business activities.
Watch Out!Incorrect use of purpose codes can lead to non-compliance with Foreign Exchange Management Act (FEMA) regulations and reporting issues to regulatory agencies. For example, if the purpose of a transaction does not align with the assigned purpose code, it may result in errors when reporting to regulatory authorities.

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List of Purpose Codes

Download the complete list of transaction purpose codes you can select during the onboarding process.
Handy TipsThe purpose code selected will apply to all international business transactions.

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Accept Payments from International Customers

Steps to accept payments from international customers if you are a new user. Steps to accept payments from international customers if you are an existing user.

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New Razorpay User

To enable international payments and accept payments from international customers for new users:
1

Step 1

Log in to the Dashboard.
2

Step 2

Navigate to Account & Settings → International payments (under Payment methods).
3

Step 3

Select the payment method you wish to activate, such as International Cards or International Bank Transfers and click Activate button corresponding to the payment method.
4

Step 4

On the International activation form page, under Business Details, enter all the details based on the business requirements and click Continue.
5

Step 5

On the Purpose code page, select the correct purpose code from the list and click Continue.
6

Step 6

On the Importer - Exporter code page:
  • If you have an IE code, select Yes. Enter the 10-digit IE code and select I agree to the Terms and Conditions. Click Continue.
  • If the IE code does not apply to you, select No, because it is not applicable for me and click Continue.
  • If you do not have an IE code but want to apply, select No, but I want to apply for it, and click Apply now.
  1. On Supporting details page, enter all the supporting details and click Submit details.
Once the details are submitted, the Razorpay Activation/Operations team verifies them. After the verification process is complete, you can start accepting payments.

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Existing Razorpay User

To update purpose codes if you are an existing user and have already enabled international payments:
1

Step 1

Click International Payments Codes under International payment settings.
2

Step 2

Update your purpose code under the International Payment Codes section.
3

Step 3

Select the appropriate Purpose Code.
Based on your business requirements, you also need to provide your HS Code or IEC Code.
  1. Click International Payments Codes under International payment settings.
  2. Update your HS Code under the International Payment Codes section.
  3. Select the appropriate Harmonised System Code, also known as HS Code.
Handy Tips
  • For Software: HSCode is 85238020 and HSDescription is Other Information technology software.
  • For Goods: Refer to the list from the DGFT website.
    1. Click International Payments Codes under International payment settings.
    2. Update your IEC Code under the International Payment Codes section.
    3. Select the appropriate Purpose Code.
    4. Enter the 10-digit Importer/Exporter Code (IEC) and click Next.
Watch Out!The IEC is a code issued by the Indian Director General of Foreign Trade (DGFT) to Indian companies that intend to export from India. You can apply for an IEC at the DGFT website.The IEC code input screen appears for specific purpose codes, (P0103) being one of them.
  1. Review and click Confirm. The Razorpay Activation/Operations team verifies the selected Purpose Code.
As consumers or buyers, you get the option to make payments through the Razorpay payment gateway. On selecting Razorpay, various payment methods will be displayed at the Razorpay checkout to complete the payment.