Term sheets in Swiss-Indian cross-border deals: six clauses that quietly decide the outcome

In a good Swiss-Indian cross-border transaction, 80 percent of the term sheet will feel standard to both sides: valuation, share class, vesting, liquidation preference, anti-dilution. The parties spend most of their time here because it is visible and quantitative. The other 20 percent is where deals quietly fail — or, just as often, where they quietly succeed for reasons that only show up in the third year. This is a practical audit list of the six clauses that Swiss and Indian counterparties almost always negotiate less than they should.

1. Dispute resolution forum

Swiss parties default to Swiss courts or the Swiss Chambers’ Arbitration Institution (SCAI) in Zurich or Geneva. Indian parties default to Indian courts or, increasingly, the Mumbai Centre for International Arbitration (MCIA). Both defaults are reasonable for domestic deals. Neither is optimal for cross-border ones. In our experience, the right answer for most Swiss-Indian mid-market deals is Singapore International Arbitration Centre (SIAC) seated in Singapore, governed by SIAC Rules, with English as the language of proceedings. Singapore is neutral to both sides, has a strong pro-enforcement judiciary, and is procedurally efficient. If one side pushes for their home forum, the other should push back.

2. Governing law

Separate from the forum is the question of which country’s contract law governs the interpretation of the agreement. Swiss law and Indian law have meaningful differences in how they treat representations, warranties, indemnities, and material-adverse-change clauses. For Swiss-Indian joint ventures, Swiss law is usually preferable for the shareholders’ agreement because Swiss contract law has cleaner commercial principles and less historical baggage. Indian law typically governs the operating company’s articles and anything that touches Indian corporate statute. The term sheet should say so explicitly in one sentence, not leave it to the definitive documents.

3. Exclusivity scope and territorial carve-outs

Swiss distributors and Indian promoters both tend to propose broad exclusivity clauses in their first draft. Broad exclusivity sounds good in month one and is ruinous in year three if either side’s priorities shift. Good term sheets narrow exclusivity along three dimensions: product scope (which SKUs or categories specifically), channel scope (B2B vs B2C, retail vs hospitality, online vs offline), and territory scope (state-level, not country-level, for India). A Kerala-focused distribution agreement that accidentally grants nationwide exclusivity removes all future strategic options for expansion through other partners.

4. Escalation and cure periods

When commercial friction starts, the term sheet’s escalation clause is what determines whether the parties work it out or lawyer up. Swiss partners usually prefer short, formal cure periods with defined escalation to C-level. Indian partners often prefer longer informal windows with multiple rounds of good-faith negotiation. Both can work, but the mismatch between them is what causes the “we keep escalating and nothing happens” complaint we hear from Swiss GPs about their Indian portfolio. The term sheet should specify exactly: who escalates, to whom, within how many calendar days, with what written notice, and what triggers the next step. Vague language here is a ticking clock.

5. Currency hedging and settlement currency

Deals in the Swiss-Indian corridor operate across three currencies de facto: CHF, EUR, and INR. The term sheet should specify which currency is the contractual settlement currency, which is the functional reporting currency, and which party bears hedging cost. For distribution deals, INR is usually the right invoice currency (the revenues are in INR), with the Swiss side pricing a margin buffer to absorb INR-CHF movements. For investment deals, USD is often the capital commitment currency with INR for operational disbursements. Getting this wrong is not a year-one problem but a year-three problem: when rates move 10-20 percent, one side is suddenly negotiating retroactive margin relief, and the other is pointing at the contract.

6. Tax gross-up and withholding

The Switzerland-India Double Taxation Avoidance Agreement (DTAA) is favourable but imperfectly implemented. Swiss companies receiving fees or royalties from Indian entities often face Indian withholding tax at source. A professionally drafted term sheet specifies whether the Indian payer grosses up the payment so the Swiss recipient receives the contracted net amount, or whether withholding is borne by the Swiss side. This single clause can shift 10-15 percent of a payment stream over the life of the contract. Swiss parties unfamiliar with Indian tax practice routinely sign this clause in a form that transfers the withholding burden to them. Review it explicitly.

Three honourable mentions

Three more clauses that consistently matter more than their word count suggests: anti-bribery and anti-corruption (ABAC) representations, where Swiss parties must carry the stricter of Swiss and Indian standards to satisfy their own compliance frameworks; data-sharing and processing across the GDPR / Swiss DSG / Indian DPDP Act stack, now that the DPDP Act is in force and creates real cross-border data obligations; and exit and drag-along structures, where Indian promoter families may quietly resist drag-along at the operating-company level even after signing it at the holding level.

The one thing that separates good term sheets from fragile ones

Good cross-border term sheets read like they were written by someone who has lived on both sides of the transaction. The language acknowledges the Swiss preference for clean, formal procedures and the Indian preference for relational flexibility, and then resolves the tension with specificity. Bad term sheets either dodge the tension with vague language, or pick one side’s defaults and hope the other signs without pushback. When we advise on Swiss-Indian deals, most of our value is in the careful reading of this 20 percent, not in the valuation debate.

Pullely Consulting advises on deal structuring and term-sheet design for Swiss and Indian counterparties across distribution agreements, joint ventures, and investment transactions. See our deal-structuring service or get in touch to stress-test a specific term sheet.