What is Forex Markup?
Forex markup is the difference between the market rate for a currency and the rate a bank or payment platform actually gives you. If the mid-market USD/INR rate is ₹84.00 and your bank converts your dollars at ₹83.40, the 60 paise gap is its markup. Unlike a visible fee, it is built into the rate, so many exporters do not notice it until they compare.
Markups vary by bank, platform, currency, transaction size and your negotiating power. Larger, regular exporters can often negotiate better rates with their bank.
Why it matters for exporters
Markup reduces the rupees you receive for every foreign payment. On a ₹50 lakh a year export business, a difference of half a percent in conversion is ₹25,000 a year. Combined with SWIFT bank charges or platform fees, it can take a noticeable bite out of your margins.
Markup also explains why the rupee figure on your FIRA or bank advice rarely matches the rupee value you calculated on the invoice date. The EDF records each invoice in its own currency and amount in Part 2B, and that foreign-currency figure is what realisation is tracked against. The rupee difference caused by markup is an exchange difference in your books, not a shortfall in realisation, though bank charges deducted from the foreign currency amount are a different matter.
Example
Wren Digital Pvt Ltd receives USD 10,000 from a US client. The mid-market rate that day is ₹84.20. Its bank converts at ₹83.55, crediting ₹8,35,500 rather than ₹8,42,000, a markup cost of ₹6,500. Wren starts asking its bank for a better rate on larger receipts and compares options before choosing a payment route, after reading forex markup explained.
Common confusion
Forex markup is not the same as bank charges, which are fees deducted from the foreign-currency amount. Both reduce what you get, but they show up in different places. Compare with the reference rate to see the gap.