What changed
Exim Bank signed a Line of Credit agreement with the Government of Suriname on February 25, 2009, for USD 4.3 million. The credit is specifically for purchasing ten crash fire tenders from Bharat Earth Movers Limited, India. At least 85% of contract value must be sourced from India, with up to 15% from outside India (excluding consultancy).
What it means for you
Indian exporters can now access this LOC to supply eligible goods and services to Suriname, with clear sourcing rules. AD Category-I banks must facilitate remittances for agency commission only after full contract payment realization, using exporter's own resources or EEFC balances. The LOC supports India's export push under Foreign Trade Policy.
What you must do
- Advise exporter constituents about the LOC and direct them to Exim Bank for full details.
- Ensure shipments under this LOC are declared on GR/SDF Forms as per RBI instructions.
- Allow agency commission remittance only after full contract value realization, using exporter's own funds or EEFC balances.
- Remind exporters that no agency commission is payable under the LOC itself.
Who it affects
AD Category-I banks, Indian exporters of goods and services to Suriname, Exim Bank
What is the purpose of this Line of Credit?
It finances the export of ten crash fire tenders from Bharat Earth Movers Limited, India, to the Government of Suriname, along with eligible goods and services.
What are the sourcing requirements under this LOC?
At least 85% of the contract price must be supplied from India; up to 15% (excluding consultancy) can be procured from outside India.
Can exporters pay agency commission under this LOC?
No agency commission is payable under the LOC itself. However, exporters may use their own resources or EEFC balances for commission, and AD banks can allow remittance after full payment realization.