What changed
Exim Bank signed a Line of Credit agreement with the Government of Chad on January 19, 2012, effective July 26, 2012, for USD 40.32 million. The credit will finance four specific projects: a compost production unit, rural electrification via solar energy, a livestock feed production unit, and extension of a spinning mill. At least 75% of goods and services must be supplied from India.
What it means for you
Indian exporters can now access this LOC to supply goods, services, and machinery for these Chad projects, with financing from Exim Bank. AD Category-I banks must ensure shipments are declared on GR/SDF forms and that no agency commission is paid from the LOC proceeds. This opens a structured export opportunity with clear sourcing and disbursement timelines.
What you must do
- Advise exporter constituents about the LOC and direct them to Exim Bank for full details.
- Ensure all shipments under this LOC are declared on GR/SDF forms as per RBI instructions.
- Allow remittance of agency commission only from exporter's own resources or EEFC account after full contract payment realization.
- Verify that at least 75% of contract value is sourced from India for eligible contracts.
Who it affects
AD Category-I banks, Indian exporters of goods, services, and machinery, Exim Bank
What is the total value of the Line of Credit to Chad?
The LOC is for USD 40.32 million, covering four projects: compost production (USD 7.20 mn), rural electrification/solar (USD 15 mn), livestock feed production (USD 2.22 mn), and spinning mill extension (USD 15.90 mn).
What is the sourcing requirement for exports under this LOC?
At least 75% of the contract price must be supplied from India. The remaining 25% (excluding consultancy) may be procured from outside India.
Can agency commission be paid from the LOC proceeds?
No, agency commission is not payable under this LOC. However, exporters may use their own resources or EEFC account balances for commission in free foreign exchange after full payment realization.