**Summary:**
This circular, issued by the Reserve Bank of India (RBI) on April 27, 2017 (A.P. DIR Series Circular No. 45), informs all Category I Authorised Dealer (AD Category I) banks about a Government of India-supported Line of Credit (LoC) of USD 52.30 million (USD Fifty two million three hundred thousand only) extended by the Export-Import Bank of India (Exim Bank) to the Government of the Republic of Mauritius.
The LoC, formalized through an agreement dated November 17, 2016, is specifically designated for financing "Project Trident" in the Republic of Mauritius. It facilitates the export of eligible goods and services from India, including plant, machinery, equipment, and consultancy services, that align with both the agreement's terms and the Government of India's Foreign Trade Policy.
Under the terms of the LoC, at least 75% of the contract price for goods and services must originate from Indian suppliers, while the remaining 25% can be procured from outside India. The agreement became effective on April 3, 2017, and stipulates a terminal utilization period of 60 months following the project's scheduled completion date.
Shipments made under this LoC must be declared on the Export Declaration Form, adhering to the RBI's prevailing guidelines. The policy explicitly states that no agency commission is payable for exports under this LoC. However, exporters may utilize their own resources or Exchange Earners Foreign Currency Account balances to pay commissions in free foreign exchange, subject to AD Category I banks' compliance with existing agency commission payment instructions and realization of the full eligible export value.
AD Category I banks are instructed to inform their exporter clients 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 from their website www.eximbankindia.in.
This circular is issued under Section 104 and Section 111 of the Foreign Exchange Management Act, 1999 (42 of 1999) and is without prejudice to other required permissions or approvals under any other applicable laws.
Key Entities Referenced
Reserve Bank of India: The central bank of India, which issued the circular.
Mumbai, Maharashtra: City in India where the Reserve Bank of India is located and from where the circular was issued.
Exim Bank: Export-Import Bank of India, which provided the Line of Credit.
Government of the Republic of Mauritius: The recipient of the Line of Credit from Exim Bank, supported by the Government of India.
Line of Credit: A credit facility of USD 52.30 million provided by Exim Bank to the Government of the Republic of Mauritius.
Project Trident: The project in the Republic of Mauritius being financed by the Line of Credit.
Foreign Exchange Management Act, 1999: The Act under which the circular's directions are issued.
Authorised Dealer Category I Banks: Banks authorized to deal in foreign exchange, to whom the circular is addressed.
RESERVE BANK OF INDIA
Mumbai - 400 001
RBI/2016-17/293 April 27, 2017
A.P. (DIR Series) Circular No. 45
To
All Category - I Authorised Dealer Banks
Madam / Sir,
Exim Bank's Government of India supported Line of Credit of USD 52.30
million to the Government of the Republic of Mauritius
Export-Import Bank of India (Exim Bank) has entered into an agreement dated
November 17, 2016 with the Government of the Republic of Mauritius for
making available to the latter, a Government of India supported Line of Credit
(LoC) of USD 52.30 million (USD Fifty two million three hundred thousand
only) for the purpose of financing Project Trident in the Republic of
Mauritius.The credit under this LoC is available for financing export of eligible
goods from India which means any goods and services including plant,
machinery and equipment and services including consultancy services, for the
purpose of Project Trident in terms of the agreement and those which are
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 this agreement,
goods 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 April 3, 2017. Under the
LoC, the terminal utilization period is 60 months after the scheduled
completion date of the project.
3. Shipments under the LoC will have to be declared on 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 its own resources or utilize
balances in its Exchange Earners’ Foreign Currency Account for payment of
commission in free foreign exchange. Authorised Dealer Category- I (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 full 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 Section 11(1) of the Foreign Exchange Management Act, 1999 (42
of 1999) and are without prejudice to permissions / approvals, if any, required
under any other law.
Yours faithfully,
(Deepak Kumar)
Chief General Manager