Do we need an Indian subsidiary or branch to open an SNRR account?

No. The account is for non-residents with a business interest in India and does not require an Indian establishment. Whether your activity in India creates a taxable presence is a separate question under the Income-tax Act and the applicable treaty, and should be examined before the contracts are signed.

Can we earn interest on the balance?

No. SNRR balances and any linked term deposits do not earn interest. The account is transactional: the regulations require the balance to be commensurate with the business for which it was opened, not a place to hold rupees.

Can funds move between our SNRR account and an NRO account?

Transfers from an NRO account to an SNRR account are not permitted. Since January 2025, transfers between repatriable rupee accounts, including between SNRR accounts, are permitted for bona fide transactions. Using the account to give rupees to an Indian resident against reimbursement abroad is prohibited.

Which bank should we approach?

Any authorised dealer bank in India, or, since January 2025, the overseas branch of an Indian AD bank in your own country. Banks differ in their documentation and in how they apply the 'business interest' test; the documentation is the same contract and corporate set that supports the underlying transaction.

SNRR Account: Full Form, Meaning, RBI Rules, Who Can Open

A foreign company that wins a contract in India, invests in an Indian company or trades with Indian counterparties will receive and pay rupees. The Special Non-Resident Rupee (SNRR) account is the FEMA instrument for doing that without an Indian entity, and without converting currency on every transaction. It has existed for years in a narrow form. RBI's amendment of 14 January 2025 widened it materially, and it is now the principal rupee account for a non-resident's business in India.

What it is

An SNRR account is an Indian-rupee account opened by a person resident outside India who has a business interest in India, with an authorised dealer bank, under Schedule 4 of the Foreign Exchange Management (Deposit) Regulations, 2016. The account is specific to the business for which it is opened and carries a nomenclature describing it; a non-resident with distinct activities, trade and investment for example, may need separate accounts.

Who can open one

foreign companies with trade or investment activity in India;
overseas investors routing foreign direct investment, external commercial borrowings or portfolio investment;
foreign individuals and professionals with service contracts in India;
unincorporated joint ventures of foreign entities with Indian partners, for infrastructure and EPC contracts among others;
units in an International Financial Services Centre, for their transactions outside the IFSC;
overseas exporters and importers dealing with Indian counterparties.

There is no minimum investment or turnover, and no requirement for an Indian subsidiary, branch or liaison office.

What changed in January 2025

Before	After the Fifth Amendment (14 January 2025)
Opened only with an AD bank in India	May also be opened at the overseas branch of an Indian AD bank
Limited to specified business transactions	Available for all permissible current and capital account transactions
Tenure capped at seven years	No cap; the account runs with the business
Transfers only to or from resident accounts	Transfers between repatriable rupee accounts permitted for bona fide transactions
Scope of "business interest" unclear	Investment, trade, trade credit, ECBs and IFSC business expressly within scope

What it can be used for

Trade: receiving export proceeds from Indian buyers in rupees; paying Indian suppliers; settling trade credit.
Capital account: routing FDI into Indian companies; receiving dividends, interest and redemption proceeds; funding and repaying ECBs; investing in Indian securities under the applicable schemes.
Services and contracts: receiving payment for services rendered in India; receiving income-tax refunds; making operational payments on contracts performed in India.
Joint ventures: the day-to-day receipts and payments of an unincorporated joint venture with an Indian partner.

The rules that bind

The balance must be commensurate with the business in India. The account is transactional, not a rupee treasury.
No interest is paid on balances or linked deposits.
Balances are repatriable.
Transfers from an NRO account into an SNRR account are not permitted.
The account may not be used to provide foreign exchange to an Indian resident against rupee reimbursement, or otherwise to round-trip funds.
Income credited to the account is taxable in India under the Income-tax Act as applicable.

SNRR and NRO

	NRO account	SNRR account
Holder	Non-resident Indian or person of Indian origin	Any non-resident with a business interest in India
Purpose	Personal income in India: rent, salary, pension	Business and investment transactions
Repatriation	Restricted, within the USD 1 million a year limit	Freely repatriable within FEMA
Tenure	Open-ended	Runs with the business; no cap since 2025

A worked example

A European engineering company wins a rupee-denominated infrastructure contract from an Indian public-sector client, with Indian subcontractors to pay and net profit to repatriate. Without an SNRR account every receipt and payment is a currency conversion with correspondent charges, remittance documentation and timing risk. With an SNRR account opened at its bank's overseas branch, client payments are credited in rupees, subcontractors are paid in rupees from the same account, and the net balance is repatriated as the contract completes. The documentation that opens the account is the contract itself and the company's corporate papers.

What to settle first

The business for which the account is opened, described in the nomenclature, and whether a second account is needed for a distinct activity.
Whether the activity creates a permanent establishment or other taxable presence in India; the SNRR account does not answer that question and does not change the answer.
The bank: an AD bank in India or the overseas branch of an Indian bank, and its documentation list.
Reporting: the underlying transactions, FDI, ECB or trade, carry their own FEMA reporting, which the account does not replace.

In short

An SNRR account is a rupee account that a person or entity resident outside India with a business interest in India may open with an authorised dealer bank under Schedule 4 of the FEMA (Deposit) Regulations, 2016.
RBI's Fifth Amendment of 14 January 2025 allowed the account to be opened at overseas branches of Indian AD banks, widened it to all permissible current and capital account transactions, removed the seven-year tenure cap, and permitted transfers between repatriable rupee accounts for bona fide transactions.
Balances are repatriable, no interest is paid, the account must be specific to the business for which it is opened, and the balance must be commensurate with that business.
It is not an NRO account: NRO is for an individual's Indian income; SNRR is for a non-resident's business transactions in India.

Questions we are asked about this

Do we need an Indian subsidiary or branch to open an SNRR account?: No. The account is for non-residents with a business interest in India and does not require an Indian establishment. Whether your activity in India creates a taxable presence is a separate question under the Income-tax Act and the applicable treaty, and should be examined before the contracts are signed.
Can we earn interest on the balance?: No. SNRR balances and any linked term deposits do not earn interest. The account is transactional: the regulations require the balance to be commensurate with the business for which it was opened, not a place to hold rupees.
Can funds move between our SNRR account and an NRO account?: Transfers from an NRO account to an SNRR account are not permitted. Since January 2025, transfers between repatriable rupee accounts, including between SNRR accounts, are permitted for bona fide transactions. Using the account to give rupees to an Indian resident against reimbursement abroad is prohibited.
Which bank should we approach?: Any authorised dealer bank in India, or, since January 2025, the overseas branch of an Indian AD bank in your own country. Banks differ in their documentation and in how they apply the 'business interest' test; the documentation is the same contract and corporate set that supports the underlying transaction.

Primary sources

The instruments this article relies on. Links go to the issuing authority; search the document number there for the text in force.