How to Pay Contractors in India

4 min read

How to Pay Contractors in India

India is the second most populous country on earth—and, as a rapidly developing nation, it’s home to a tremendous wealth of talent. Companies looking for skilled contractors often find them in India, whether it’s programming and IT support or 3D modeling and engineering specialization. And while you’re bound to find the skills you need by prospecting here, the question for many companies is often how to pay contractors in India. 

Small-to-medium-sized businesses seek out contractors overseas because it saves them money. Yet, they’re often dismayed to see that transferring funds internationally is a costly endeavor! It’s a conundrum that discourages many of these businesses from even considering the low-cost, highly skilled prospects of the Indian talent pool.

If you’re in this predicament, here’s a look at how to tap into the wealth of opportunity Indian independent contractors offer, while ensuring they’re paid on-time, accordingly and conveniently. 

Why hire contractors in India?

Indian contractors have become some of the most reputed in the world for many reasons. In fact, it’s not just United States companies that rely on contractors in India—companies around the world often turn to India first. 

The biggest reason is value. Many developed countries have stronger currencies than the Indian Rupee, which allows international companies to leverage talent at a lower cost. Even expensive Indian contractors are moderately priced by world standards! Companies can pay a fair price for experience and skill, without shortchanging contractors—the cost of living also tends to be much more affordable in India.

The other major reason companies prospect help in India has to do with population. With 1.38 billion people in the country, it’s safe to say that India’s talent pool is extensive. Whether you need labor for quick and easy data entry or someone to program an app, you’ll find them in India. 

As if these reasons weren’t enough, India is also a hub for English-speaking contractors who are strong communicators. Whether by phone, email, messaging app or over video, it’s easy to communicate the expectations of your working relationship with bilingual contractors in India.

Currency and transfer considerations

Paying contractors in India is easier than you might think. While the country itself is still developing, a significant percentage of contractors in India are traditionally banked. This makes funds transfer simpler. The only real consideration is currency exchange. Thankfully, the U.S. Dollar (USD) and Indian Rupee (INR) currency pair is well-tracked and -traded.

The Indian Rupee has about 75% of the purchasing power of the U.S. Dollar. As a result, it’s often a toss-up as to whether contractors in India prefer landed funds in one currency vs. the other. Those who are traditionally banked might prefer INR for simplicity’s sake, while unbanked contractors may accept USD as a way to preserve greater purchasing power. 

Ways to pay contractors in India

Interested in working with contractors in India? Make sure you have an established way to pay them! This is one of the upfront details to discuss when considering international talent, and the mode of payment may differ depending on currency preference, banked status or payment frequency. Here are some of the common options:

  • Wire transfer. Wire transfers are great for larger lump sums and one-time payments. They’re extremely fast and secure, but they cost a hefty fee to send (and sometimes receive). They’re not ideal for ongoing payments over the long-term. 
  • Check or money order. These modes of payment are all but obsolete in most instances, largely because they’re not digital. That said, some Indian contractors may prefer money orders if they’re unbanked or live in more rural areas. 
  • Bank transfer. Overseas bank transfers come with a number of problems. Sometimes, the bank will stop payment if it looks suspicious. Other times, currency conversion rates are a killer. They’re also impossible if your contractor is unbanked! 
  • Digital payments. Digital payments require both sender and recipient to open a digital wallet, but once that hurdle is clear, it’s smooth sailing. Recipients can choose how they want their funds and senders have full transparency while they’re in transit. 

Every situation is unique, but some modes of payment are more viable than others. It’s up to companies to consider the variables at play and decide what’s easiest for the contractor and best for the organization when it comes to paying contractors in India. 

The best way to pay independent contractors in India

The best way to pay contractors in India is one that takes into consideration all elements of the working relationship. Whether you’re contracting out a one-time, short-lived project or ongoing work to a new member of you expanding global team, making sure they get paid is a top priority. 

Looking for the closest thing to a one-size-fits-all solution? Digital payments have become the premier way to pay contractors overseas for a reason. Test drive Veem today and see for yourself how easy it is to pay contractors in India, no matter the circumstances. 



* This blog provides general information and discussion about global business payments and related subjects. The content provided in this blog ("Content”), should not be construed as and is not intended to constitute financial, legal or tax advice. You should seek the advice of professionals prior to acting upon any information contained in the Content. All Content is provided strictly “as is” and we make no warranty or representation of any kind regarding the Content.