An NDS comes as a non-deliverable interest rate swap (NDIRS), which takes the form of an interest rate swap, or a non-deliverable cross-currency swap (NDCCS), which takes the form of a currency swap. On each payment date, the rupee or other currency amount is converted into dollars at the fixing (the exchange rate on the determination date) and paid in dollars.
Consider a hypothetical NDIRS with a notional amount of INR 840 million, in which the fixed interest is INR 27.3 million and the floating interest is INR 25.2 million. The difference of INR 2.1 million is converted into dollars at the fixing and paid, which is USD 25,000 at a fixing of 84.00 rupees.
It differs from an NDF, which pays a single difference without delivering principal, in that payments occur many times during the term.