What changed
Exim Bank signed a credit agreement with Sudan on February 12, 2007, effective March 29, 2007, for a USD 48 million line of credit. The LOC covers projects like agricultural inputs, lab equipment, solar electrification, and Sudan Railways, with at least 85% Indian content.
What it means for you
Indian exporters can now access this LOC to finance exports to Sudan, with strict Indian-origin sourcing requirements. Banks must ensure no agency commission is paid from LOC proceeds, though exporters may use EEFC balances for commissions after full payment realization.
What you must do
- Inform exporter clients about the LOC and direct them to Exim Bank for full details.
- Ensure all shipments under the LOC are declared on GR/SDF forms as per RBI instructions.
- Do not allow agency commission payments from LOC proceeds; only permit remittances from exporter's own resources or EEFC after full contract value realization.
- Verify compliance with FEMA sections 10(4) and 11(1) when processing related transactions.
Who it affects
AD Category-I banks, Indian exporters to Sudan, Exim Bank
What is the minimum Indian content required for exports under this LOC?
At least 85% of the contract price must be supplied from India or be of Indian origin.
Can agency commission be paid from the LOC proceeds?
No, agency commission is not payable from LOC funds. Exporters may use their own resources or EEFC balances for commission in free foreign exchange after full payment realization.
What is the terminal utilization period for project exports under this LOC?
For project exports, the terminal utilization period ends 48 months from the scheduled completion date(s) of the contract(s).