What changed
Exim Bank signed a Line of Credit agreement with Mauritania on February 9, 2010, effective from September 3, 2010, for USD 21.80 million. The credit covers two projects: a potable drinking water project (USD 6.80 million) and an agriculture development project (USD 15 million). At least 85% of goods and services must be from India, with up to 15% procured from outside India.
What it means for you
Indian exporters can now tap into this LOC to supply eligible goods and services to Mauritania, with financing backed by Exim Bank. Banks must ensure that shipments are declared on GR/SDF forms and that no agency commission is paid from the LOC proceeds. This opens a structured export financing channel for water and agriculture sectors.
What you must do
- Inform exporter customers about the LOC and its terms, including the 85% Indian content requirement.
- Advise exporters to contact Exim Bank for full details and to log on to www.eximbankindia.in.
- Ensure all shipments under this LOC are declared on GR/SDF forms as per RBI instructions.
- Allow remittance of agency commission only from exporter's own resources or EEFC account after full contract payment realization.
- Note the last dates for LC opening and disbursement: 48 months from project completion for project exports, and 72 months from agreement execution (February 8, 2016) for supply contracts.
Who it affects
AD Category-I banks, Indian exporters of goods and services to Mauritania, Exim Bank
What is the total value of the Line of Credit to Mauritania?
The LOC is for USD 21.80 million, split into USD 6.80 million for a drinking water project and USD 15 million for an agriculture development project.
What is the minimum Indian content requirement under this LOC?
At least 85% of the contract price must be supplied from India; the remaining 15% can be procured from outside India for eligible contracts.
Can agency commission be paid from the LOC proceeds?
No, no agency commission is payable under this LOC. If needed, exporters must use their own resources or EEFC account balances, and AD banks can allow such remittance only after full contract payment is realized.