Merchanting Trade module

Merchanting trade: both legs on one record

A merchanting trade is an import leg and an export leg that must close together. FxLayer keeps both on one record with the transit documents, counts the gap between the legs and runs the profit test in any currency pair.

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See the Merchanting trade module run

Goods bought in Vietnam and sold to Dubai, never entering India: both legs and the Bill of Lading on one record, the six-month clock, the import leg's request letter (S0108), MTT declaration, Form A2 and Form 145 signed, the FX board, the buyer's receipt (P0108), the closure request to the bank, the MTT register and the half-yearly statement.

Full demo: Merchant trade (MTT). Vietnam to Dubai, never through India; S0108 and P0108, MTT declaration, Form A2 and Form 145, the six-month clock. Sent to the bank. Both legs, one bank. Hindi and English audio.

Merchanting trade, end to end. A demo workspace with fictitious data. English and Hindi audio tracks: pick yours under Settings › Audio track on the player. Watch on YouTube

Chapters

  1. 0:05How merchanting works: the six-month clock
  2. 0:43Recording the trade and the Bill of Lading
  3. 1:40Import leg request letter (S0108)
  4. 2:42MTT declaration, Form A2, Form 145
  5. 3:54FX board: compare banks and book
  6. 4:16Supplier paid, outlay clock running
  7. 4:44Export leg receipt (P0108)
  8. 5:33Reporting to the bank and closure request
  9. 6:24MTT register and half-yearly statement
  10. 6:48Recap
How it runs

One trade, two legs

Import leg

The supplier's invoice and the payment under S0108 on Form A2, with the transit documents attached.

Export leg

The buyer's invoice and the receipt under P0108, with the margin between the legs.

One AD bank

Both legs go through the same AD bank, checked when the trade is entered.

Closure

The merchant trade declaration and the request for closure are drawn from the trade once both legs are complete.

The clocks it keeps

  • Six months between the legs: for trades from 1 October 2025 (four months before that), with a warning in the last 30 days.
  • The completion window: informational for trades from the 1 October 2026 regime.
  • The outlay: the days foreign exchange is out between paying the supplier and being paid by the buyer, counted on the record.

Papers from the trade

  • Form A2 for the import leg: in RBI's layout, under S0108. Form A1 is only for goods imported into India.
  • The merchant trade declaration: carried by the bank request for either leg, drawn from the trade as it stands.
  • Request letters: on your letterhead, in your AD bank's format where it publishes one.
  • Profit test: the margin between the legs in any currency pair, shown in rupees.

Guides for Merchanting trade

Merchanting trade: buying abroad, selling abroad, reporting in IndiaMerchanting trade: goods bought in one country and sold to another without entering India. The 2026 conditions, time limits, purpose codes and bank papers.Form A1 or Form A2: which application does your bank need?Form A1 is the bank application for paying for imported goods; Form A2 covers other outward remittances like services. The difference and what goes with each.RBI purpose codes: the five characters that classify every paymentEvery foreign remittance to or from India carries an RBI purpose code. The codes used most for imports, exports, merchanting and services, and why they matter.Your AD bank: the gatekeeper for every foreign trade paymentAuthorised dealer (AD) Category I banks handle foreign exchange for RBI. What your AD bank checks, reports and closes, and how to get requests through faster.The hidden cost in every foreign payment: the bank's spreadBanks convert foreign payments at a rate with a margin over the market rate. How to measure the spread, compare your AD banks and negotiate a better rate.

Alongside Merchanting trade

Three neighbouring parts of the platform. Each has its own page.

Import payments · IDPMSBills of Entry matched to remittances and closed in IDPMS.Export realisation · EDPMSShipping Bills tracked to realisation, eBRC and EDPMS closure.Services receipts & paymentsForm 145 / 146 worksheets, the monthly EDF and FIRA.

Look up a code or a date, with nothing stored: Purpose code finder · Deadline calculator.

Questions

A purchase of goods from one foreign country and their sale to another without the goods entering India. Both legs go through the same AD bank, the goods must be importable into India, the supplier is paid under S0108 and the buyer pays under P0108.
At most six months for trades from 1 October 2025, four months before that. FxLayer counts the gap on the record and warns in the last 30 days.
Form A2. Form A1 is for payments for goods imported into India, so it is not used for a merchanting trade.