What changed
Exim Bank signed a LoC agreement with Eswatini on February 1, 2021, effective September 27, 2021, for $10.4 million. The credit finances a Disaster Recovery Site, with a DPR cost cap of 1% of the credit. Terminal utilization is 60 months post-project completion.
What it means for you
Indian exporters can now bid for contracts under this LoC, with a mandatory 75% Indian content. AD banks must handle EDF declarations and commission remittances per existing norms. This opens a specific export financing channel for disaster recovery infrastructure to Eswatini.
What you must do
- Inform exporter customers about this LoC and direct them to Exim Bank for full details.
- Ensure all shipments under this LoC are declared on Export Declaration Forms as per RBI instructions.
- Allow agency commission remittances only after full export value realization and compliance with extant rules.
- Verify that at least 75% of contract value is sourced from India for eligible exports.
Who it affects
AD Category-I banks, Indian exporters of goods and services, Exim Bank
What is the purpose of this $10.4 million LoC to Eswatini?
It finances construction of a Disaster Recovery Site in Eswatini, with a DPR cost not exceeding 1% of the credit.
What are the sourcing requirements for exports under this LoC?
At least 75% of contract price must be supplied from India; the remaining 25% can be procured from outside India.
Can exporters pay agency commission on these exports?
No agency commission is payable for export under the LoC, but if required, the exporter may use own resources or EEFC balances for payment of commission in free foreign exchange after full realization of eligible export value, subject to extant instructions.