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Last week I tried to exchange some Swiss Francs into Indian rupees. For that I visited a big bank and they told me that they have rupees but I'm not allowed to import any into India. Is this really true?

And if so, what's the reason behind such a law?

P.S. The bank also told me that in practice it isn't a problem if you take money below 200 Swiss Francs into the country.

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There's an important update to the answer, added now with a link to the customs page. Import of Indian currency is allowed...but only for Indian citizens. This is an important distinction they make which foreign travellers need to be aware of. –  Ankur Banerjee Oct 12 '11 at 15:02
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up vote 21 down vote accepted

Currency inflow/outflow in India is regulated under the Foreign Exchange Management Act. The relevant foreign exchange / customs rules are:

  • Import of Indian Currency is prohibited. However, in the case of passengers normally resident in India who are returning from a visit abroad, import of Indian Currency upto Rs. 7500 is allowed. This translates to roughly USD 150 (depending on current exchange rates).
  • There is no limit on amount you can bring in foreign currency into India. If the amount is above USD 5000 in cash or if carried in form of travellers cheques + cash, then any amount above USD 10,000 has to be declared using a customs declaration form when entering India.

Even though you are technically allowed to bring in large amounts of cash/money in other forms, you may be asked questions by Customs officials when you hand in your declaration form.

I believe the limit your bank has mentioned refers to the first rule, although at current exchange rates it won't translate to 200 Swiss francs. In practice customs officials rarely, if ever, check how much currency a traveller is carrying but if you do get stopped for inspections for any reason and they find you exceeding any of the limits mentioned above, then they can take action against you.

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The reasons why this is done: one supposed reason it to prevent import of fake currency into India. And also, probably, regulating inflow of foreign exchange on Indian central banks own terms / rates. –  Ankur Banerjee Oct 12 '11 at 15:14
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I had no knowledge of such a regulation, so I must say I've been lucky so far, because each time I visited India I had some rupees at the end of the stay which I kept for the following trip (usually one year later... ). The amount was never very high, let's say 1,500 rupees at the most, but I guess I would have landed in trouble all the same, as I'm not a regular resident there. –  Paola Oct 18 '12 at 20:42
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