What changed
Exim Bank signed a Line of Credit agreement with the Government of Cote d'Ivoire on March 31, 2010, effective November 26, 2010, for USD 30 million. The credit supports exports of eligible goods, machinery, equipment, and consultancy services from India for a Rice Production Programme. At least 85% of contract value must be sourced from India, with up to 15% procured abroad.
What it means for you
Banks can now facilitate export transactions under this LOC, ensuring compliance with FEMA and RBI guidelines. The 85% Indian content requirement boosts domestic sourcing, while the 48-72 month timeline gives flexibility for project and supply contracts. No agency commission is payable from LOC funds, but exporters can use their own EEFC accounts for commissions post-realization.
What you must do
- Inform exporter clients about the LOC and direct them to Exim Bank for full details.
- Ensure all shipments under the LOC are declared on GR/SDF Forms as per RBI instructions.
- Verify that at least 85% of contract value is sourced from India before processing remittances.
- Allow agency commission remittances only from exporter's own resources or EEFC accounts after full contract payment realization.
Who it affects
AD Category-I banks, Exporters dealing with Cote d'Ivoire, Exim Bank
What is the minimum Indian content required under this LOC?
At least 85% of the contract price for goods and services (including consultancy) must be supplied from India.
Can agency commission be paid from the LOC proceeds?
No, agency commission is not payable under the LOC. Exporters may use their own resources or EEFC balances for commission in free foreign exchange after full payment realization.
What are the key timelines for this LOC?
The credit agreement is effective from November 26, 2010. For project exports, LCs must be opened and disbursed within 48 months from scheduled contract completion. For supply contracts, the deadline is 72 months (March 30, 2016) from the agreement execution date.