First of all export proceeds should be in freely convertible Currency.As INR is not a freely Convertible Cusrrency export proceeds can not be remitted in INR. So far as concerned payment by third party in export,the sales and purchase agreement itself ( between exporter and Importer) should show that the payment of the goods exported will be made other party (other then the consignee) .The name, address of the party who will have to remit export proceeds to exporter on behalf of the Importer should be mentioned in the above said agreement and all the three parties ie exporter,Importer and the party who will have to remit export proceeds should sign the agreement.This is required at the time of executing the sales and purchase agreement ie before the export is effected.If after export the buyer /consignee say that the export proceeds will be remitted by third partyit is also possible you have to contact your banker for that a letter from the Consignee sighed by the third party who will pay the export proceeds is required.
The following are the FEMA requirement for Thir party payment of export proceeds.
Third party payments for export / import transactions
Taking into account the evolving international trade practices, it has been decided to permit third party payments for export / import transactions can be made subject to conditions as under:
a) Firm irrevocable order backed by a tripartite agreement should be in place. However, it may not be insisted upon in cases where documentary evidence for circumstances leading to third party payments / name of the third party being mentioned in the irrevocable order/ invoice has been produced subject to:
(i) AD bank should be satisfied with the bona-fides of the transaction and export documents, such as, invoice / FIRC.
(ii) AD bank should consider the FATF statements while handling such transaction.
b. Third party payment should be routed through the banking channel only;
c. The exporter should declare the third party remittance in the Export Declaration Form and it would be responsibility of the Exporter to realize and repatriate the export proceeds from such third party named in the EDF;
d. It would be responsibility of the Exporter to realize and repatriate the export proceeds from such third party named in the EDF;
e. Reporting of outstanding, if any, in the XOS would continue to be shown against the name of the exporter. However, instead of the name of the overseas buyer from where the proceeds have to be realized, the name of the declared third party should appear in the XOS;
f. In case of shipments being made to a country in Group II of Restricted Cover Countries, (e.g. Sudan, Somalia, etc.), payments for the same may be received from an Open Cover Country; and
g. In case of imports, the Invoice should contain a narration that the related payment has to be made to the (named) third party, the Bill of Entry should mention the name of the shipper as also the narration that the related payment has to be made to the (named) third party and the importer should comply with the related extant instructions relating to imports including those on advance payment being made for import of goods.