What changed
Exim Bank signed a Line of Credit agreement with EBID on July 21, 2011, effective March 12, 2012, for USD 150 million. This enables financing of eligible Indian goods, services, and project exports to 15 West African nations. The circular provides operational instructions to AD Category-I banks.
What it means for you
Indian exporters gain a structured credit facility to expand into West Africa, with Exim Bank backing payments. Banks must ensure compliance with 75% Indian content rule and handle commission remittances only after full contract realization. This supports India's export push under Foreign Trade Policy.
What you must do
- Inform exporter clients 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 remittances only after full contract value realization and from exporter's own resources or EEFC account.
- Verify that at least 75% of contract value comprises Indian goods/services for eligible contracts.
Who it affects
AD Category-I banks, Indian exporters to West Africa, Exim Bank
What is the last date for opening Letters of Credit under this LOC?
For project exports, it is 48 months from the scheduled completion date of the contract; for supply contracts, it is 72 months from the execution date of the Credit Agreement (July 20, 2017).
Can exporters pay agency commission under this LOC?
No agency commission is payable under the LOC. However, exporters may use their own resources or EEFC balances to pay commission in free foreign exchange after full contract value realization, subject to prevailing RBI instructions.