This circular, RBI/2021-2022/85 A.P. (DIR Series) Circular No.09, issued by the Reserve Bank of India (RBI) on August 12, 2021, informs all Category I Authorised Dealer (AD) banks about a Government of India-supported Line of Credit (LoC) of USD 100 million extended by the Export-Import Bank of India (Exim Bank) to the Government of the Republic of Mauritius. The agreement, effective from July 22, 2021, is for the procurement of defense items from India. At least 75% of the contract price for goods, works, and services must be supplied by the seller from India, while the remaining 25% can be procured from outside India. The terminal utilization period for the LoC is 60 months after the scheduled completion date of the project. Shipments under this LoC must be declared in the Export Declaration Form as per RBI's instructions. No agency commission is payable for exports under this LoC, however, exporters may use their own resources or Exchange Earners Foreign Currency Account balances for commission payments in free foreign exchange, subject to AD Category I banks' compliance with existing regulations. AD Category I banks are instructed to inform their exporter constituents about this LoC and advise them to obtain detailed information from Exim Bank's office at Centre One, Floor 21, World Trade Centre Complex, Cuffe Parade, Mumbai 400 005, or their website www.eximbankindia.in. The circular is issued under Section 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for regulating the banking system and managing the country's monetary policy.
Mumbai, Maharashtra: The financial capital of India, where the Reserve Bank of India and Exim Bank are located.
Exim Bank: Export-Import Bank of India, a financial institution that facilitates India's international trade.
Government of the Republic of Mauritius: The government of Mauritius, the recipient of the Line of Credit from India.
Line of Credit (LoC): A credit facility of USD 100 million provided by Exim Bank to the Government of the Republic of Mauritius, supported by the Government of India.
Foreign Trade Policy of the Government of India: The set of guidelines and regulations governing the import and export of goods and services in India.
Foreign Exchange Management Act (FEMA), 1999: An act of the Parliament of India to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India
Export Declaration Form: A document required for declaring shipments under the Line of Credit, as per instructions issued by the Reserve Bank of India.
भारतीय �रज़व र् ब�क/RESERVE BANK OF INDIA
मबुं ई/ MUMBAI – 400 001
RBI/2021-2022/85
A.P. (DIR Series) Circular No.09 August 12, 2021
All Category – I Authorised Dealer Banks
Madam/Sir
Exim Bank's Government of India supported Line of Credit (LoC) of
USD 100 million to the Government of the Republic of Mauritius
Export-Import Bank of India (Exim Bank) has entered into an agreement dated February
19, 2021 with the Government of the Republic of Mauritius, for making available to the
latter, Government of India supported Line of Credit (LoC) of USD 100 million (USD One
hundred million only) for procurement of defence items from India. Under the
arrangement, financing of export of eligible goods and services from India, as defined
under the agreement, would be allowed subject to their being eligible for export under the
Foreign Trade Policy of the Government of India and whose purchase may be agreed to
be financed by the Exim Bank under this agreement. Out of the total credit by Exim Bank
under the agreement, goods, works and services of the value of at least 75 per cent of
the contract price shall be supplied by the seller from India, and the remaining 25 per cent
of goods and services may be procured by the seller for the purpose of the eligible
contract from outside India.
2. The Agreement under the LoC is effective from July 22, 2021. Under the LoC, the
terminal utilization period is 60 months after the scheduled completion date of the project.
3. Shipments under the LoC shall be declared in Export Declaration Form as per
instructions issued by the Reserve Bank from time to time.4. No agency commission is payable for export under the above LoC. However, if
required, the exporter may use his own resources or utilize balances in his Exchange
Earners’ Foreign Currency Account for payment of commission in free foreign exchange.
Authorised Dealer (AD) Category- I banks may allow such remittance after realization of
full eligible value of export subject to compliance with the extant instructions for payment
of agency commission.
5. AD Category – I banks may bring the contents of this circular to the notice of their
exporter constituents and advise them to obtain complete details of the LoC from the Exim
Bank’s office at Centre One, Floor 21, World Trade Centre Complex, Cuffe Parade,
Mumbai 400 005 or from their website www.eximbankindia.in.
6. The directions contained in this circular have been issued under section 10(4) and
11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999) and are
without prejudice to permissions/ approvals, if any, required under any other law.
Yours faithfully
(R. S. Amar)
Chief General Manager