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Understanding a Letter of Credit: How India’s Exporters Get Paid and Where It Goes Wrong

A letter of credit is the most secure payment instrument in international trade, yet between 60 and 80 percent of documents presented under LCs are rejected on first presentation. This article explains the complete LC mechanism, every party's role, the UCP 600 rules that govern it, India's FEMA and RBI compliance layer, the six most common discrepancies that delay payment, and how exporters can protect themselves.











