What changed
Exim Bank signed a Line of Credit agreement with the Government of Comoros on February 22, 2013, effective July 23, 2013, for USD 41.60 million. The credit supports an 18 MW power project in Moroni, with at least 75% of goods and services sourced from India. Last date for LC opening and disbursement is 48 months from project completion for project exports, or 72 months (by February 21, 2019) for supply contracts.
What it means for you
Indian exporters can now access this LOC to supply eligible goods, machinery, and consultancy for Comoros' power project, with assured payment from Exim Bank. Banks must ensure compliance with FEMA sections 10(4) and 11(1) for all transactions under this credit. No agency commission is payable from the LOC, but exporters may use their own EEFC balances for commissions after full payment realization.
What you must do
- Inform exporter clients about this 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 after full contract value realization and using exporter's own resources or EEFC balances.
- Verify that at least 75% of contract value is sourced from India for any financing under this LOC.
Who it affects
AD Category-I banks, Indian exporters of goods, services, and machinery, Exim Bank, Government of the Union of Comoros
What is the total value of the Line of Credit to Comoros?
The LOC is for USD 41.60 million, as per the agreement dated February 22, 2013.
What is the minimum Indian content requirement for exports under this LOC?
At least 75% of the contract price must be for goods and services supplied from India.
Can exporters pay agency commission under this LOC?
No agency commission is payable from the LOC itself, but exporters may use their own resources or EEFC balances for commission after full payment realization.