What changed
Exim Bank signed a Line of Credit agreement with Sudan on July 24, 2013, effective December 20, 2013, for USD 125 million to finance the Mashkour Sugar Project. The circular outlines sourcing requirements (75% Indian content), timelines for LCs and disbursement (48 months for projects, 72 months for supply contracts), and rules on agency commission.
What it means for you
Indian exporters can now tap this credit line for sugar project-related exports to Sudan, with assured financing from Exim Bank. Banks must ensure compliance with FEMA provisions, including proper GR/SDF form declarations and commission payment rules. The 75% local sourcing mandate boosts Indian goods and services exports.
What you must do
- Advise exporter customers about the LOC details and direct them to Exim Bank for full terms.
- Ensure shipments under this LOC are declared on GR/SDF forms as per RBI instructions.
- Verify that at least 75% of contract value is sourced from India before processing remittances.
- Allow agency commission remittances only after full contract payment realization, using exporter's own resources or EEFC balances.
Who it affects
AD Category-I banks, Indian exporters to Sudan, Exim Bank
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.
What are the last dates for opening LCs and disbursement?
For project exports, 48 months from scheduled completion date; for supply contracts, 72 months from July 24, 2013 (i.e., July 23, 2019).
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 payment realization.