What changed
Exim Bank signed a Line of Credit agreement with Guyana on February 29, 2024, effective June 24, 2024. RBI circular dated July 8, 2024, informs AD Category-I banks of the terms, including the 75% Indian sourcing requirement and 48-month disbursement window after project completion.
What it means for you
Indian exporters can now bid for contracts under this LoC, with financing assured by Exim Bank. Banks must ensure shipments are declared on EDF/Shipping Bill as per RBI norms. No agency commission is payable, but if needed, exporters can use own resources or EEFC balances after full export value realization.
What you must do
- Inform exporter constituents about this LoC and direct them to Exim Bank for full details.
- Ensure all shipments under this LoC are declared on Export Declaration Form/Shipping Bill per RBI instructions.
- Allow remittance of agency commission only after full eligible export value realization and compliance with extant guidelines.
- Verify that at least 75% of contract value is sourced from India as per LoC terms.
Who it affects
AD Category-I banks, Indian exporters of goods and services, Exim Bank
What is the value and purpose of this Line of Credit?
The LoC is for USD 2.50 million to the Government of Guyana for installing a Solar Photo Voltaic Power Plant at Cheddi Jagan International Airport.
What are the 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 agency commission be paid under this LoC?
No agency commission is payable. If required, exporters may use own resources or EEFC balances after full export value realization, subject to RBI guidelines.