Paying an Indian agency from overseas is ordinary international commerce, and it still produces more month-one friction than almost anything else in the engagement. Not because the rules are hard, but because nobody agrees the details before the first invoice arrives.
Here are the details. Treat all of it as a map of what to discuss with your accountant rather than as tax advice — the treatment depends on your circumstances and on both countries' rules at the time.
Currency: decide who carries the movement
Agree the invoicing currency before the first invoice. If the agency invoices in rupees, you carry the exchange rate movement. If it invoices in your currency, they do. Neither is wrong; what causes arguments is a rate that was never specified and then moved.
If you settle on rupee invoicing, agree which rate applies and on what date. If you settle on your own currency, expect the agency to build in a buffer, because they are carrying a risk.
GST: exported services are usually zero-rated
Services supplied from India to a recipient outside India generally qualify as an export of services and are zero-rated under Indian GST, provided the conditions are met — payment received in convertible foreign exchange being the central one.
In practice this means an Indian agency invoicing an overseas client should normally not be adding Indian GST to the invoice. If GST appears on your invoice, ask why rather than assuming it is correct; the usual explanation is that the agency is registered but has not filed a Letter of Undertaking, which is their administrative problem rather than yours.
Your own side has its own treatment. In the UK the reverse charge usually applies; in the EU something similar; in the US there is generally no equivalent consumption tax but you may need a W-8BEN-E on file and should check whether withholding applies under the relevant treaty. Confirm all of this with your accountant before the first payment.
The transfer itself
Three routes, with different trade-offs:
Bank wire. Reliable, universally accepted, slow — typically a few working days — and the fees are rarely transparent. Intermediary banks can deduct along the way, which is why the amount received sometimes does not match the invoice.
Specialist transfer services. Faster and usually a better rate than a high-street bank. Check the agency can receive through them and that the documentation they generate satisfies their bank.
Card or payment-platform rails. Convenient for small monthly amounts, expensive at retainer scale, and the processing fee usually exceeds anything you save in time.
Whichever you use, agree who absorbs the transfer fee. The common failure is an agency invoicing a round figure, the bank deducting along the way, and a short payment arriving that somebody has to chase.
Documentation the agency will need
Indian agencies receiving foreign currency typically need evidence of inward remittance from their bank for compliance and for their GST position. You do not have to do anything unusual — but a clear payment reference quoting the invoice number makes their reconciliation possible, and a vague reference creates a week of email.
Ask for a proper tax invoice carrying their GSTIN and the export declaration. It is standard, and it protects both sides if anyone's filings are ever examined.
Paying an Indian agency: what to settle in writing
- Invoicing currency and, if rupees, which rate and on what date.
- Payment terms in days, and what happens on a late payment.
- Who absorbs transfer and intermediary fees.
- Whether ad spend is paid by you directly to the platforms or passes through the agency. Direct is almost always better — you keep the card, the data and the account.
- What the invoice must show, so your own bookkeeping does not bounce it.
That last point about ad spend is worth emphasising. Paying platforms directly from your own card keeps ownership of the account unambiguous and removes any argument about what was actually spent. The wider contract checklist is in nine clauses that matter.
Questions people ask before hiring
Should an Indian agency charge GST to an overseas client?
Generally no. Services supplied from India to a recipient abroad usually qualify as an export of services and are zero-rated, provided the conditions are met. If GST appears on your invoice, ask why before paying it.
Who should pay the bank transfer fees?
Agree it in writing before the first invoice. The common failure is the agency invoicing a round figure while intermediary banks deduct along the way, so a short payment arrives and someone has to chase the difference.
Should ad spend go through the agency?
Usually not. Paying the platforms directly from your own card keeps ownership of the ad account unambiguous, removes any question about what was actually spent, and means a change of agency does not interrupt billing.
What documentation should I ask for?
A proper tax invoice showing the agency's GSTIN and the export declaration, and a payment reference that quotes the invoice number. The agency will also need evidence of inward remittance from their bank, which a clear reference makes straightforward.