What changed
Exim Bank signed a Line of Credit agreement with Mauritius on February 12, 2014, effective May 15, 2014, for USD 46 million. The LOC finances defence-related equipment and vehicles for the Mauritius Police Force, with at least 75% of contract value sourced from India.
What it means for you
Indian exporters can now access this LOC to supply defence goods and services to Mauritius, with financing terms extending up to 72 months for supply contracts. Banks must ensure no agency commission is paid from LOC funds, though exporters may use own resources for commission after full payment realization.
What you must do
- Advise 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 remittance of agency commission only after full contract value realization and compliance with existing norms.
- 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 defence equipment and services, Exim Bank
What is the total value of this Line of Credit?
The LOC is for USD 46 million, as per the agreement dated February 12, 2014.
What are the key sourcing requirements for exporters?
At least 75% of the contract price must be supplied from India; the remaining 25% can be procured from outside India.
Can exporters pay agency commission under this LOC?
No agency commission is payable from LOC funds. Exporters may use own resources or EEFC balances for commission after full payment realization, subject to RBI guidelines.