What changed
Exim Bank signed a Line of Credit agreement with the Government of Lao PDR on February 20, 2009, effective July 24, 2009, for USD 17.34 million. The credit supports Indian exports of goods, services, and consultancy for irrigation schemes in Chamassack Province, executed by WAPCOS (India) Limited.
What it means for you
Banks must facilitate exports under this LOC by ensuring shipments are declared on GR/SDF forms and that at least 60% of contract value originates from India. No agency commission is payable under the LOC, but remittances from exporter's own resources or EEFC accounts are allowed post-realization of full contract value.
What you must do
- Inform exporter constituents about the LOC and direct them to Exim Bank for full details.
- Ensure shipments under the LOC are declared on GR/SDF forms as per RBI instructions.
- Allow remittance of agency commission only from exporter's own resources or EEFC accounts after full contract payment realization.
- Verify that at least 60% of contract value comprises Indian-origin goods and services.
Who it affects
AD Category-I banks, Exporters dealing with Lao PDR, Exim Bank, WAPCOS (India) Limited
What are the timelines for LC opening and disbursement?
For project exports, the last date is 48 months from scheduled completion; for supply contracts, it is 72 months from the execution date of the Credit Agreement (February 20, 2009), i.e., by February 19, 2015.