What changed
Exim Bank signed a Line of Credit agreement with Ghana on December 14, 2012, effective June 27, 2013, for USD 35 million. The credit finances eligible Indian goods, services, and machinery for a sugar plant project. Last date for LC opening/disbursement is 48 months from project completion or 72 months (Dec 13, 2018) for supply contracts.
What it means for you
Indian exporters can now access this LOC to supply to Ghana's sugar plant, with 75% local sourcing mandatory. AD banks must facilitate remittances only after full contract payment realization and ensure no agency commission is paid from LOC funds. This opens a structured export financing channel for Indian firms.
What you must do
- Inform exporter clients about the LOC and its 75% Indian sourcing requirement.
- Verify GR/SDF form declarations for shipments under this LOC as per RBI instructions.
- Allow agency commission remittances only from exporter's own resources or EEFC after full payment realization.
- Direct exporters to Exim Bank for detailed LOC terms and conditions.
Who it affects
AD Category-I banks, Indian exporters of goods, services, and machinery, Exim Bank, Government of Ghana
What is the minimum Indian content required under this LOC?
At least 75% of the contract price must be supplied from India; the remaining 25% can be procured from outside India.
Can agency commission be paid from the LOC proceeds?
No, agency commission is not payable under this LOC. Exporters may use their own resources or EEFC balances for commission in free foreign exchange after full payment realization.
What are the key timelines for this LOC?
The credit agreement is effective from June 27, 2013. For project exports, LCs must be opened and disbursed within 48 months from contract completion; for supply contracts, within 72 months (by December 13, 2018).