What changed
Exim Bank signed a Line of Credit agreement with Tanzania on March 28, 2011, effective May 20, 2011, for USD 36.56 million. The credit will finance 723 vehicles under the India Africa Fund, with at least 75% of goods and services sourced from India. Last date for opening LCs and disbursement is 72 months from execution for supply contracts.
What it means for you
Indian exporters can now tap this LoC for vehicle exports to Tanzania, ensuring 75% local sourcing. AD banks must handle GR/SDF declarations and allow commission remittances only after full payment realization. No agency commission is payable under the LoC itself.
What you must do
- Inform exporter customers about this LoC and direct them to Exim Bank for full details.
- Ensure shipments under this LoC are declared on GR/SDF forms as per RBI instructions.
- Allow agency commission remittances only after full contract value realization and compliance with existing 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 vehicles and related goods/services, Exim Bank
What is the total value of this Line of Credit?
USD 36.56 million, as per the agreement dated March 28, 2011.
What is the last date for disbursement under supply contracts?
72 months from the execution date, i.e., March 27, 2017.
Can exporters pay agency commission under this LoC?
No agency commission is payable under the LoC, but exporters may use own resources or EEFC balances for commission in free foreign exchange after full payment realization.