For a resident Indian company or other non-individual remitting for consultancy procured outside India, the RBI prior-approval threshold is project-based. The verified rule uses amounts exceeding USD 10 million per infrastructure project and USD 1 million per other consultancy project. Exactly the applicable limit does not exceed it. Classify the project and reconcile its total remittances before authorising an instalment.
This guide uses the RBI Master Direction–Other Remittance Facilities, displayed as updated on 1 October 2026 and checked on 23 October 2026. Its examples concern rupee-funded current-account consultancy remittances by persons resident in India other than individuals. They do not apply the resident-individual LRS limit, authorise capital-account transactions or decide the separate treatment of eligible foreign-currency-account funding.
Read paragraph 4.3 with the Current Account Transactions Rules
RBI Master Direction paragraph 4.3 and Schedule III paragraph 2(iii) set out the consultancy thresholds. The infrastructure category uses the definition cross-reference specified there, rather than an unrestricted commercial description. A consultant’s invoice saying “infrastructure advisory” is not adequate classification evidence. Put the project’s actual nature and the applicable definition before the Authorised Dealer bank where the classification affects approval.
The same Master Direction reproduces Rules 5 and 6 concerning RFC/EEFC funding and their qualifications. Because account-funded transactions require a separate exemption analysis, the numerical examples below expressly assume ordinary rupee-funded drawal with no applicable funding exemption. Do not mechanically extend these approval conclusions to every foreign-currency-account debit, or treat an account exemption as removal of all FEMA, banking or tax requirements.
Use one project register across contracts, vendors and banks
The text states a limit per project. As a practical application of that unit, prepare a single project record across advisory contracts, phases, consultants, instalments and change orders. Separate purchase orders are not, without more, evidence of independent projects. Equally, a combined annual accounts total for genuinely independent projects is not itself the statutory per-project test. These are control implications of the stated unit, not an additional numerical aggregation formula prescribed in the Direction.
The register should identify the project owner, scope, approved classification, contracts, currency, amounts already remitted, committed changes and proposed next payment. If contracts use a currency other than USD, obtain the bank’s documented equivalent-value methodology before deciding headroom. The illustrations use USD throughout and do not invent a regulatory conversion rate or valuation date.
Escalate foreseeable crossings before the remittance is made
Distinguish a contract’s project scope from a single payment request. A split-payment instruction does not reset a project limit. When a change order makes the overall remittance profile exceed the threshold, obtain the AD’s review and required RBI approval before proceeding with an affected remittance. Do not interpret the numerical excess as an amount that alone requires approval while the rest of the project can automatically proceed.
A satisfactory payment file links the consultancy agreement, deliverables, invoice, corporate authority and commercial purpose to the beneficiary and project. Paragraph 6 addresses AD operational responsibilities. Being below this threshold answers the prior-approval question under this particular provision, not every question about permissibility or documentation.
Analyse Indian withholding, treaty characterisation and any GST import-of-services consequences independently under the law applicable to the payment date. Do not assume that RBI approval grants a tax exemption, or that a tax certificate resolves a FEMA approval requirement. This article does not assert a withholding rate, tax form or GST charge for an unexamined service.
Worked illustrations
These illustrations use fictional facts and expressly stated assumptions. Amounts are Indian rupees unless a different currency or unit is specified. They are independent examples, not findings about any actual client.
Illustrative example 1: The ordinary-project boundary is strict exceeds
For a verified non-infrastructure project, total consultancy remittances of USD 1,000,000 equal the threshold. This amount alone does not trigger the exceeds test. A total of USD 1,000,001 is USD 1 above the threshold and triggers the paragraph 4.3 prior-approval requirement on the stated funding assumptions. The approval question is not limited to whether the final dollar can be separately paid.
Illustrative example 2: Infrastructure classification changes the ceiling
Assume a project has been verified to fall within the referenced infrastructure definition. USD 10,000,000 equals its consultancy threshold; USD 10,000,001 exceeds it by USD 1. Do not use this illustration to infer that a software installation, factory expansion or real-estate engagement necessarily qualifies. The qualifying classification is a stipulated, separately verified fact.
Illustrative example 3: The same fee needs different classification evidence
A USD 2,000,000 consultancy profile exceeds the other-project limit by USD 1,000,000. Against a properly established infrastructure limit, it has USD 8,000,000 headroom. The arithmetic difference is not a choice of regime: actual project classification determines which threshold applies. An unsupported infrastructure label would conceal a material approval requirement.
Illustrative example 4: Two advisers on one project do not get two limits
A non-infrastructure project has consultancy remittances of USD 600,000 to adviser A and USD 500,000 to adviser B. The project total is USD 1,100,000, exceeding USD 1,000,000 by USD 100,000. Keeping each vendor below one million does not demonstrate compliance with a limit expressed per project. Escalate the combined payment plan before processing it.
Illustrative example 5: Instalments retain the project identity
One ordinary consultancy project has planned instalments of USD 400,000, USD 400,000 and USD 300,000. Total remittances will be USD 1,100,000; the first two total USD 800,000 and leave only USD 200,000 numerical headroom. The third USD 300,000 payment cannot be cleared by treating it as a new USD 1,000,000 allowance. Address the foreseeable threshold crossing in advance.
Illustrative example 6: Independent projects are not automatically one annual pool
Assume evidence establishes two genuinely independent ordinary projects with consultancy remittances of USD 700,000 and USD 800,000. Each is below USD 1,000,000, by USD 300,000 and USD 200,000 respectively. Their USD 1,500,000 annual combined total does not, solely because of that aggregation, exceed either project’s limit. If the scopes are really phases of one project, the conclusion changes.
Illustrative example 7: A change order consumes headroom before payment
An ordinary project originally calls for USD 900,000 and adds a USD 200,000 change order: revised total USD 1,100,000. USD 800,000 has been remitted and the next proposed payment is USD 300,000. Numerical headroom to the threshold is only USD 200,000, leaving a USD 100,000 crossing. Obtain AD review and required approval before the affected remittance; do not assume that paying only a smaller instalment cures the known project-level issue.
Ten-step verification table
| Step | Verification | Evidence to retain |
|---|---|---|
| 1 | Confirm FEMA residence and non-individual status | Entity and residence memorandum |
| 2 | Characterise the service and current-account transaction | Consultancy scope, purpose and legal classification |
| 3 | Identify the real project boundary | Project charter and linked work orders |
| 4 | Verify any claimed infrastructure classification | Applicable definition and supported AD submission |
| 5 | Confirm funding and any distinct RFC/EEFC analysis | Bank-account source and exemption working if relevant |
| 6 | Aggregate consultancy remittances across project vendors and phases | Project-wide contract and payment register |
| 7 | Reconcile currencies, commitments and change orders | Documented USD equivalent method and revised budget |
| 8 | Compare against the strict exceeds threshold before payment | Limit, cumulative profile and headroom calculation |
| 9 | Obtain the required prior approval through the proper process | AD correspondence and RBI approval where applicable |
| 10 | Reconcile the executed remittance and separate tax compliance | Bank advice, invoice settlement and payment-date tax file |
Sixteen practitioner FAQs
1. Does this article apply an individual’s LRS limit?
No. Its stated population is persons other than individuals under the consultancy provision. Do not copy an individual’s allowance into this project test.
2. Is the consultancy limit annual?
The verified consultancy wording is per project. A calendar-year or financial-year spreadsheet is useful control data but is not a replacement for that unit.
3. Does exactly USD 1 million require approval for an ordinary project?
Not solely under an exceeds-USD-1-million trigger. Other conditions and approvals must still be checked.
4. Can each consultant receive a separate project allowance?
Not merely because a second vendor is appointed. Establish the underlying project and aggregate the remittance profile on that basis.
5. Can each invoice restart the limit?
No. Separate invoices or payment stages do not establish separate projects.
6. Does the USD 10 million category cover every industrial assignment?
No. Verify the infrastructure definition cross-reference in the Direction. A broad commercial label is insufficient.
7. Who should resolve a material classification doubt?
Prepare the factual and legal classification file and obtain the AD’s review before payment. Do not select the larger ceiling merely to avoid escalation.
8. What if the contract is denominated in euros?
Document the bank’s applicable USD-equivalent method and the relevant valuation basis. This article does not prescribe an unsupported exchange rate.
9. Should the register cover payments through two banks?
Yes. A project-wide register should reconcile all remittances; changing the processing bank does not change the project’s substance.
10. Does an unbilled change order matter?
Review its effect on the foreseeable project remittance profile before payment. Waiting until the final invoice can leave inadequate time for prior approval.
11. Can the excess amount alone be sent after obtaining approval?
Do not assume the approval covers only the numerical excess. Follow the AD/RBI approval scope for the actual project and remittance.
12. What if the project is cancelled or fees are refunded?
Retain the contractual change and actual settlement evidence. Obtain AD treatment before treating a cancellation or refund as reusable headroom.
13. Are EEFC-funded payments governed identically?
Rules 5 and 6 require a separate account-funding and exception analysis. The article’s numerical conclusions assume rupee-funded drawal without such an exemption.
14. Does being below the threshold guarantee bank release?
No. The bank still needs a permissible, documented transaction and compliance with applicable operational requirements.
15. Does RBI approval settle Indian withholding?
No. Apply the payment-date income-tax and treaty analysis separately; an exchange-control approval is not a tax exemption.
16. Can two genuine projects be assessed independently?
The provision uses per project. Preserve evidence of genuinely independent scope rather than relying on separate labels for connected phases.
Conclusion
Maintain one project-level remittance file and resolve classification and funding before releasing payment. A threshold comparison is meaningful only when the project boundary and total remittance profile are supported.