What changed
Exim Bank signed a $300 million Line of Credit agreement with SBM (Mauritius) Infrastructure Development Company Ltd on October 17, 2022, effective November 7, 2022. The LoC finances Phase-IV of the Mauritius Metro Express Project via redeemable preference shares in public sector entities. At least 75% of goods, works, and services must be sourced from India, with the remaining 25% allowed from outside India.
What it means for you
Indian exporters can now participate in a major infrastructure project in Mauritius with assured financing from Exim Bank. AD banks must ensure that export documentation (EDF/Shipping Bill) follows RBI norms and that no agency commission is paid from LoC proceeds; any commission must come from exporter's own resources or EEFC account after full export value realization. This strengthens India's export footprint in Africa and supports the 'Make in India' initiative.
What you must do
- Inform exporter constituents about the LoC details and direct them to Exim Bank for complete information.
- Ensure shipments under this LoC are declared on Export Declaration Form/Shipping Bill as per RBI instructions.
- Verify that at least 75% of contract value is sourced from India before processing export documents.
- Allow agency commission remittances only after full export value realization and from exporter's own resources or EEFC account.
- Comply with FEMA sections 10(4) and 11(1) while processing related transactions.
Who it affects
AD Category-I banks, Indian exporters of goods and services, Exim Bank, SBM (Mauritius) Infrastructure Development Company Ltd
What is the minimum Indian content requirement under this LoC?
At least 75% of the contract price for goods, works, and services must be supplied from India; the remaining 25% can be procured from outside India.
Can exporters pay agency commission on exports under this LoC?
No agency commission is payable from LoC proceeds. If needed, exporters must use their own resources or balances in their Exchange Earners' Foreign Currency Account, and remittance is allowed only after full export value realization.
What is the validity period of this Line of Credit?
The LoC is effective from November 7, 2022, and the terminal utilization period is 48 months from the scheduled completion date of the project.