A contract between a German company and an Indian party should state the governing law clearly, choose arbitration rather than courts for disputes, fix a neutral seat such as Singapore or a German city, and comply with Indian rules on stamping, FEMA payments and withholding tax. A German court judgment is hard to enforce in India because Germany is not a reciprocating territory, while a foreign arbitral award can be enforced under the New York Convention.
- Document route
- German notary, pre-certification, then Indian mission attestation
- Time difference
- India is 3.5 hours (summer) to 4.5 hours (winter) ahead
- Core law
- Indian Contract Act 1872
- Foreign awards
- Part II, Arbitration Act 1996
Commercial Contracts from Germany: how it works
We review the German template against the Indian Contract Act 1872 and the deal itself. Penalty clauses common in German contracts are treated differently in India, where courts award reasonable compensation up to the stated sum rather than enforcing a penalty as such. Post-termination non-compete clauses against an Indian distributor or employee are generally void under section 27. Payment terms should match FEMA rules for import and export payments, and any royalty or service fee paid out of India should account for withholding tax and the rates under India's tax treaty with Germany.
The dispute clause deserves the most attention. Choose an arbitral institution, a seat outside India or within it, the language and the number of arbitrators. If the seat is in Germany, Indian courts can still grant interim relief under section 9 of the Arbitration and Conciliation Act unless the parties exclude it, which is useful for freezing assets in India. Contracts executed in India, or brought into India later, must be stamped under the relevant state law, and an unstamped agreement can face delays when relied on in Indian proceedings.
What clients in Germany should know
- German general terms and conditions printed on invoices are unlikely to bind an Indian buyer unless they are clearly incorporated into a signed agreement.
- Bilingual German and English contracts should state which language prevails; Indian courts and arbitrators work in English.
- Signing electronically is lawful in India for most commercial contracts, but documents that need registration or stamping in India may still require wet signatures and physical stamping.
Step by step from Germany
Video consultation
A call at a time that suits Germany, after we have read your documents.
Documents signed in Germany
German notary, pre-certification, then Indian mission attestation
Work in India
Our team files, appears and follows up in India, and shares scans of everything filed.
Result and handover
Certified copies and originals are couriered to you in Germany where needed.
The full guide
This page covers what changes when you are in Germany. For the law, the documents and the step-by-step procedure, read our main page on Commercial Contracts, or see all services for clients in Germany and the Doing Business in India practice area.
Questions from clients in Germany
Should we choose German law for a contract with an Indian supplier?
You can, and an arbitral tribunal will apply it. Mandatory Indian rules, such as FEMA, stamp duty and some competition and consumer laws, still apply to performance in India.
Can we sue our Indian distributor in a German court?
You can, but a German judgment would have to be followed by a fresh suit in India to reach Indian assets. Arbitration avoids this second round.
Is DIS arbitration recognised in India?
Awards made in Germany, including under the DIS rules, are foreign awards that can be enforced in India under Part II of the Arbitration and Conciliation Act, subject to the limited grounds for refusal.