What changed
Exim Bank signed a line of credit agreement with Senegal on April 21, 2011, effective August 24, 2011, for USD 27.5 million. The credit finances Indian goods and services for Senegal's rural electrification project, with a 75% Indian content requirement.
What it means for you
Banks must facilitate exports under this LOC by advising exporters on documentation and compliance. No agency commission is payable under the LOC, but exporters can use their own resources or EEFC balances for commissions after full payment realization. The LOC supports Indian exports to Senegal with specific timelines for project and supply contracts.
What you must do
- Inform exporter clients about the LOC and its terms, including the 75% Indian content requirement.
- Ensure shipments under this LOC are declared on GR/SDF forms as per RBI instructions.
- Allow remittance of agency commission only after full contract payment realization, using exporter's own resources or EEFC balances.
- Advise exporters to contact Exim Bank for detailed LOC information.
Who it affects
AD Category-I banks, Exporters dealing with Senegal, Exim Bank
What is the minimum Indian content required under this LOC?
At least 75% of the contract price must be supplied by sellers from India; the remaining 25% can be procured from outside India, excluding consultancy services.
What are the timelines for opening letters of credit and disbursement?
For project exports, the last date is 48 months from the scheduled completion date of contracts. For supply contracts, it is 72 months from the execution date of the credit agreement, i.e., April 20, 2017.
Can agency commission be paid under this LOC?
No agency commission is payable under the LOC. However, exporters may use their own resources or EEFC balances to pay commission in free foreign exchange after full payment realization.