Introduction: Cross-Border Is Not “Copy–Paste” Contracting

For Indian businesses working with overseas customers, suppliers, investors, or technology partners, cross-border contracts are no longer rare exceptions. Whether it is a SaaS licence to a US client, a manufacturing supply agreement with Europe, or a distribution arrangement in the Middle East, the contract has to survive not just commercial change, but also legal scrutiny across more than one country.

A practical, senior-management level view of how to structure cross-border contracts that involve India, what to watch out for in governing law and jurisdiction clauses, and how to improve the chances that your contract will be enforceable when something actually goes wrong.

1. Start with the Commercial Map, Not Just Legal Boilerplate

Cross-border documentation becomes messy when the contract is drafted in isolation from the commercial reality. Before you finalise terms, it helps to clearly map:

  • Who is supplying what, to whom, and from where: Identify the exact contracting entities (often different from the “brand” name) and where they are incorporated.
  • Where value is created and where risk sits: Manufacturing in India, warehousing in Dubai, and customers in the EU may mean three different regulatory environments.
  • How money flows: Currency, payment channels, RBI/foreign exchange regulations, and tax deducted at source (TDS) or withholding obligations must be aligned with law and banking practice.

Once the commercial map is clear, the legal terms can be structured to match it, instead of patching clauses later to fix avoidable contradictions.

2. Choosing Governing Law and Jurisdiction: More Than a Prestige Clause

One of the most contested parts of a cross-border contract is the governing law and jurisdiction clause. It is tempting to treat this as a prestige or bargaining point (“we want Indian law” vs “we insist on English law”), but the decision should be driven by enforcement and practicality.

  • Governing Law: This is the law used to interpret the contract. Common choices in India-linked contracts include Indian law, English law, New York law, and sometimes the law of the counterparty’s home country.
  • Jurisdiction: This answers the question “which court or tribunal will hear disputes?” It may be a particular city’s courts, or an arbitral institution such as SIAC, LCIA, ICC, or an India-seated arbitration.
  • Separate Courts and Arbitration: Parties sometimes provide for arbitration but also give certain courts “exclusive jurisdiction”. This needs careful drafting to avoid internal conflict.

For many commercial transactions, a neutral governing law (such as English law) and institutional arbitration seated in a commercially respected jurisdiction can offer both sides comfort that disputes will be handled in a predictable, business-friendly way.

3. Arbitration and Enforceability: Thinking Ahead to the “Worst Day”

In cross-border disputes, the key practical question is: if you win, can you actually enforce the award or judgment where the other party has assets?

  • New York Convention Arbitration Awards: India is a signatory to the New York Convention, which allows foreign arbitral awards from notified territories to be enforced in India as if they were domestic decrees, subject to limited defences.
  • Court Judgments: Foreign court judgments may need to be recognised and enforced under Indian civil procedure rules, which can be more time-consuming and uncertain than enforcement of arbitral awards.
  • Seat of Arbitration vs Venue: The "seat" of arbitration has legal significance. It decides which country's courts supervise the arbitration. The "venue" is merely where hearings physically take place.

When you choose arbitration, you are not just choosing a dispute forum—you are choosing an enforcement pathway. That pathway must be aligned with where you realistically expect to find the counterparty’s assets.

4. Regulatory and FX Considerations: Aligning Contract and Compliance

Even the best-drafted cross-border contract can run into trouble if it ignores regulatory and foreign exchange (“FX”) requirements in India or the other jurisdiction.

  • Foreign Exchange Management: In India, payments in and out of the country are governed by FEMA and associated regulations. Structures like royalty, licence fees, technical service fees, and export proceeds each have their own rules, reporting timelines, and banking documentation.
  • Sanctions and Export Controls: Parties must ensure the transaction does not breach international sanctions, export control regulations, or sector-specific restrictions in either country.
  • Tax Withholding and Gross-Up: Cross-border payments often require withholding tax at source. Contracts should clearly address who bears the tax burden and whether the payer must “gross up” to ensure the recipient gets a net amount.

A simple way to reduce risk is to have your finance, tax, and legal teams jointly review the contract structure before signing, instead of treating contract signing and compliance filings as separate, disconnected events.

5. Key Commercial Clauses: Price, Delivery, and Risk Transfer Across Borders

The “business” terms in a cross-border contract—price, delivery, and risk—are deeply connected with logistics and law.

  • Delivery Terms (Incoterms): Using internationally recognised Incoterms (such as FOB, CIF, DAP) clarifies who is responsible for freight, insurance, customs clearance, and risk at each stage.
  • Price Adjustments: Exchange-rate fluctuations, changes in duties, or regulatory costs can erode margins. Well-drafted adjustment or renegotiation clauses help manage these shocks.
  • Limitation of Liability: Caps on liability, exclusions for indirect or consequential loss, and carve-outs (for IP infringement, data breach, or confidentiality) need special attention in cross-border transactions where potential loss can be large.

For Indian exporters and service providers, clarity on when risk passes, who bears customs and logistics issues, and how currency risk is handled, often makes the difference between a profitable arrangement and a dispute-prone one.

6. IP, Data, and Confidentiality in Cross-Border Deals

In technology, media, and knowledge-intensive industries, the most valuable asset might not be physical goods at all, but intellectual property and data.

  • Ownership vs Licence: Clearly state who owns pre-existing IP, who owns improvements, and what rights are merely licenced (scope, territory, exclusivity, duration, and sub-licensing).
  • Data Protection: If personal data or sensitive information is processed or transferred, the contract must take into account Indian data laws as well as foreign regimes (such as GDPR for EU data subjects).
  • Confidentiality and Trade Secrets: Cross-border movement of employees, consultants, and service providers increases the risk of leakage. Robust confidentiality obligations and practical access controls are both required.

Where valuable IP or data is involved, it is often wise to pair the main commercial contract with a dedicated IP/technology annex and a clearly structured data processing or transfer addendum.

7. Boilerplate That Matters: Force Majeure, Change in Law, and Anti-Corruption

What looks like boilerplate at the back of the contract often plays a decisive role when things go wrong in multiple jurisdictions.

  • Force Majeure: Events such as pandemics, export bans, war, or shipping disruptions can affect one country but not the other. The clause should define how obligations are suspended, extended, or terminated.
  • Change in Law: If a change in law makes performance more burdensome or impossible in one country, the contract should specify how parties will allocate additional costs or renegotiate.
  • Anti-Corruption and Compliance: Global counterparties increasingly insist on anti-bribery, sanctions-compliance, and ethics undertakings. Indian companies should ensure these are realistic and consistent with their internal policies.

Properly tailored boilerplate reduces the scope for opportunistic behaviour when the external environment shifts.

8. Execution, Stamping, and Local Formalities

Finally, even a perfectly drafted cross-border contract can be weakened by poor execution formalities.

  • Signing and Authority: Ensure the signatories on each side have proper board or corporate authority, especially in group-company structures.
  • Stamp Duty and Registration: Under Indian law, certain contracts require stamping and, in some cases, registration. An inadequately stamped document may face hurdles in enforcement.
  • Electronic Signatures: Many cross-border contracts are signed electronically. The e-signature method should be acceptable under the laws of both relevant jurisdictions and under institutional rules if arbitration is chosen.

Maintaining a clean, well-organised execution file—with board resolutions, KYC documents, and signature logs—can significantly smoothen enforcement and regulatory interactions later.

Conclusion: Design Contracts for Reality, Not Just Negotiation

Cross-border contracts involving India are no longer exotic; they are part of day-to-day business for many growing companies. The risk lies not in using foreign law or international arbitration per se, but in signing documents that do not match your commercial reality, compliance framework, or enforcement strategy.

By approaching cross-border contracts with a clear commercial map, carefully chosen governing law and dispute resolution mechanisms, and informed attention to regulatory, tax, IP, and execution issues, Indian businesses can move from “document-signing” to genuine risk management.

If your organisation is negotiating or reviewing cross-border agreements, our team works with promoters, legal teams, and boards to align contract structures with business goals and enforcement pathways—before you commit your signature.