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Despite the shift towards digital finance, many businesses still use traditional bank transfers, not realizing the hidden fees, poor exchange rates, and delays that come with them. The fact is that banks are no longer the most cost-effective or efficient way to send payments from India to Canada.
In this guide we will explore the best ways to send payments from India to Canada, comparing costs, speed and reliability so you can make informed decisions that optimize your international payments.
Cross border remittances refer to the transfer of money from one entity to another in different countries. For India to Canada remittances, they include business payments, education fees, bills from suppliers, and remittances for personal expenses. As international business and trade between the countries continue to increase, fast and inexpensive transfer options are necessary now more than ever.
Cross-border payments between Canada and India are regulated under stringent guidelines to meet the financial laws of both nations. Reserve Bank of India (RBI) regulates outward remittances under Liberalized Remittance Scheme (LRS) that stipulates limits and acceptable purposes for remitting funds overseas. Payments on the Canadian side need to meet FINTRAC (Financial Transactions and Reports Analysis Centre of Canada) requirements to avoid money laundering and financial fraud.
When transferring money from India to Canada, companies and individuals are required to use approved channels that comply with regulatory standards, such as SWIFT transfers, internet remittance services and forex platforms such as Karbon Forex. Adherence to these regulations facilitates seamless transactions without any rejections or delays.
When sending payments from India to Canada, several factors impact the overall cost, speed and security of your transaction. Here’s what to consider before you transfer:
INR to CAD exchange rates fluctuate daily and impact the final amount received in Canada. Banks offer weaker exchange rates than forex specialists and fintech platforms. Use a provider that offers real-time rate optimization and minimal markup to save costs.
Cost of sending money from India to Canada varies across providers. Banks charge high wire transfer fees, forex conversion charges and hidden intermediary bank fees. Digital platforms and forex services like Karbon Forex charge lower and more predictable costs by eliminating unnecessary banking intermediaries.
Traditional SWIFT bank transfers take 2–5 business days depending on the intermediary banks. Digital payment solutions like Karbon complete transactions within 24-48 hours for urgent payments.
Sending money from India to Canada requires compliance with RBI’s Liberalized Remittance Scheme (LRS) and Canada’s FINTRAC regulations. KYC (Know Your Customer) and AML (Anti-Money Laundering) checks are mandatory for all transactions. Choose an RBI-authorized forex service to be compliant and reduce the risk of transfer rejections or delays.
When sending money from India to Canada, the payment method you choose matters. Each has its own cost, speed and convenience. Here’s an overview of the most popular methods:
For Indian businesses making regular payments to Canada, Karbon Forex is a quicker, cheaper option. Unlike traditional bank transfers, Karbon Forex removes unnecessary banking intermediaries to give you better exchange rates with lower fees. It is fully compliant with RBI regulations so the transfer process is smooth and secure.
Best for: Indian businesses, startups and exporters making international payments to Canada.
Downside: Not for personal remittances
SWIFT bank transfers are a widely used method to send money to Canada. Banks like SBI, ICICI, HDFC and Axis Bank offer outward remittance services and allow direct transfer to Canadian accounts. However, these come with high charges, poor exchange rates and slow processing time (2-5 business days).
Best for: Large business transactions, sending money to Canadian bank accounts.
Downside: High costs due to wire transfer charges and bad forex rates.
Digital remittance platforms like Wise, Remitly and Western Union are a quicker and often cheaper option than banks. These services offer better exchange rates and lower fees and are a good option for personal remittances and small business payments. However, there are limits on transfer amount and additional fees for instant transfers.
Best for: Individuals sending small to mid-sized payments to Canada.
Downside: Transfer limits and extra charges for instant transactions.
New age fintech solutions and remittance apps are transforming India to Canada payments. Companies like PayPal, InstaReM and Xoom offer seamless integration with bank accounts, mobile wallets and debit/credit cards. Some even have multi-currency wallets to help businesses manage international payments better.
Best for: Businesses with recurring transactions, freelancers receiving payments.
Downside: Some providers charge high withdrawal or conversion fees.
Indian banks issue Foreign Currency Demand Drafts (FCDDs) in CAD which can be physically mailed to recipients in Canada and deposited into their bank accounts. While highly secure, this method is slow and outdated and not practical for urgent payments.
Best for: University fee payments, real estate transactions.
Downside: Takes weeks and lost drafts can delay payments further.
NRIs can transfer funds from their Non-Resident External (NRE) or Non-Resident Ordinary (NRO) accounts in India to their accounts in Canada. These accounts offer tax-free international remittances and zero forex charges.
Best for: NRIs transferring personal funds between India and Canada.
Downside: Requires an NRE/NRO account which is not available to residents of India.
Many Indian banks offer Forex Prepaid Cards loaded with CAD which can be used to withdraw cash or make payments in Canada without incurring forex charges. While good for travel and short term expenses, not suitable for business payments.
Best for: Travelers, students studying in Canada.
Downside: Not for large amounts or business transactions.
For Indian businesses exporting to Canada, a Letter of Credit (LC) issued by an Indian bank guarantees payment from the Canadian buyer. This is commonly used in large trade transactions to mitigate risk for both parties.
Best for: Indian exporters shipping goods to Canada.
Downside: Requires bank approval and additional paperwork
For Indian businesses making payments to Canada, speed, compliance and cost is key. Whether you’re paying suppliers, contractors or partners, follow this structured process to optimize your cross-border transactions.
Before you make the payment, register and verify your account with a payment provider that supports India to Canada transactions. The process varies by provider but typically involves:
The right payment method depends on transaction size, urgency, and cost. Here’s what to compare:
Exchange Rates: Check mid market rates on Google or Reuters to avoid hidden markups.
Transfer Fees: Some providers charge fixed fees and others take a percentage of the amount.
Processing Time: SWIFT transfers take days, fintech platforms offer same day processing.
Regulatory Compliance: Ensure the provider follows RBI and FINTRAC regulations to avoid transaction holds.
Once you've selected the provider, follow these steps to execute the payment:
Note that large payments require an invoice, purpose code or Form A2 declaration.
After you make the payment, track the transfer: Use the MT103 receipt to track SWIFT bank transfers. Platforms like Karbon and Payoneer provide real-time tracking and estimated arrival times.
Sending money from India to Canada doesn’t have to be hard. Choose the right method, understand exchange rates and fees, and comply with Indian and Canadian regulations, and you’ll be optimized for speed and cost.
Why Karbon Forex?
Competitive exchange rates, lower fees than banks, and a process designed for Indian businesses makes Karbon a smarter way for outward remittances.
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Transfer time varies depending on the option you choose. Traditional SWIFT bank transfers can be slow, taking 2-5 business days to complete. Digital payment solutions and fintech platforms have made the process much faster:
RBI's LRS has limits on outward remittances. These limits keep changing, so please check with your payment provider or RBI directly. The limit is on the total amount you can send abroad in a financial year, for various purposes like travel, education, medical treatment, and business investments.
Document requirements depend on the payment type and amount. For business payments you'll need:
Personal remittances may need fewer documents, but always be ready to provide ID and purpose of transfer.
Reputable online transfer services are very safe and regulated. Platforms like Karbon Forex, Wise and others have to comply with both Indian and Canadian regulations. They have robust security measures like encryption, multi-factor authentication, and comprehensive fraud detection systems.
Personal remittance options are quite flexible. Online money transfer services work for individual transfers, NRI (Non-Resident Indians) can use NRE/NRO account transfers. Forex cards are useful for travelers and students, for easy access to funds in Canada.
It’s usually better to transfer in CAD when sending payments to Canada. If you send money in INR, the recipient’s bank in Canada will handle the currency conversion, often applying higher exchange rate markups and additional fees. This means the final amount received in CAD will likely be lower than expected.
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