Cross-border payment firms serving Indian exporters are beginning to feel the impact of shipping delays in the Gulf Cooperation Council (GCC) and West Asia, as stalled cargo shipments slow collections and delay settlements, industry executives said. The disruption is most visible in merchandise exports, while service exporters such as software firms and freelancers have so far seen limited impact.
While the immediate impact of the West Asia conflict is being felt largely by goods exporters, with shipments of electronics, food products and other items getting delayed, the disruption is also creating a backlog of payments that is likely to clear only after consignments reach buyers in the GCC and other Middle East markets.
Executives at cross-border payment startups said this is not yet a failure of the payment processing system itself, but they are closely watching whether prolonged delays in logistics and reconciliation begin to affect a wider set of exporters and payment flows.
“At an industry level, we are seeing a 20% to 30% dip in Middle East-linked volumes at the start of March among exporters with monthly business volumes of up to $2 million. The month is still underway, but the disruption is already visible,” said a founder at a large cross-border payments startup, who asked not to be identified.
Cross-border payments are a relatively new but fast-growing fintech segment in India, with the Reserve Bank of India’s (RBI) payment aggregator–cross border (PA-CB) framework drawing in a new crop of startups alongside larger payments firms looking to build export and import payment rails. Firms such as Skydo and BriskPe have secured RBI approvals in recent months, while Razorpay and Cashfree are also expanding in the category, reflecting the size of the opportunity in a market tied closely to India’s trade flows.
India’s trade exposure makes the segment worth watching closely. According to government data, goods trade between India and the GCC stood at $178.56 billion in FY25, with exports at $56.87 billion and imports at $121.66 billion, accounting for 15.42% of India’s global trade.
India’s cross-border payments opportunity is already large. In 2023, the country’s goods and services trade added up to more than $1.6 trillion, based on estimates from the World Bank and the World Trade Organization, compiled by Banco Santander and the World Bank’s World Integrated Trade Solution (WITS).
The founder quoted earlier said the immediate strain from the Middle East conflict is visible across categories such as mobile exports, fruits and vegetables, textiles and agro-processing in GCC markets. The affected businesses are largely wholesalers and commodity suppliers, rather than consumer brands selling directly into the region, the founder added.
That pressure is especially acute for food and agro exporters because delays do not just hold up payments, but can also erode the value of the underlying goods.
“For agro processing, that remains a challenge because perishability of the goods is a major issue,” the founder said, adding that war-related disruption also leaves many exporters exposed because such scenarios are often excluded from insurance cover.
The founder added that the current hit is more likely to show up as a revenue dip from lower volumes than as margin pressure, while warning that a prolonged disruption could eventually spill over to routes serving the UK and Europe as well.
Other payment startups in the cross-border space are preparing for potential disruption by ensuring customers have multiple ways to receive payments, rather than relying on a single collection route. “We are preparing for (any possible) disruption by giving customers multiple ways to receive overseas payments, including local transfers and wire payments, so exporters are not dependent on a single collection route.” Xflow chief executive Anand Balaji said.
Balaji said the company is also watching currency volatility as a second-order effect of the US-Iran conflict. “Customers are a little worried. As the rupee weakens, exporters are trying to see if it continues sliding,” he said, adding that Xflow has “always provided our customers tools to manage that”.
There are also concerns within the industry that delayed export proceeds, once released, could arrive in a bunch and create a temporary backlog for Indian cross-border payment fintechs to process. An industry executive working with a cross border payments startup said the current disruption does not point to a structural weakness in Indian cross-border fintechs.
“Under RBI rules, exporters now have up to 15 months to realise export proceeds, which gives them a wider compliance window even if payment terms come under pressure during the conflict,” the executive said, asking not to be identified. The executive added that a backlog of delayed payments does not by itself mean Indian fintechs will struggle to process them.
Once funds are remitted and payment confirmation is available, the platforms can process the flows, though a bunching of receipts over a short period could temporarily raise the operational load on reconciliation, payout processing and customer support. This, the executive said, is better understood as temporary strain from higher batch volumes rather than any systemic settlement failure.
Those concerns have intensified after several global banks in the West Asia region moved staff out of offices or shifted to remote operations as a precaution. Citi asked employees to leave its Dubai offices, Standard Chartered reiterated work-from-home guidance, and HSBC temporarily shut its branches in Qatar after heightened security concerns in the Gulf.
However, the executive added that most cross-border payment flows are electronic, so branch closures by themselves should have limited direct impact. RBI’s cyber resilience and digital payment security rules require non-bank payment operators to maintain business continuity, incident response and disaster recovery arrangements, the executive added.
“If a bank or data centre is affected, the more likely outcome is slower processing and temporary rerouting through backup systems, rather than a prolonged halt in payment flows,” the executive said.