Export-Import (Exim) bank of India on behalf of the Government of India supported Line of Credit (LoC) of USD 310 million to the Republic of Zimbabwe to finance repowering of Hwange Thermal Power Station.
- For this purpose, Exim Bank had entered into an agreement with the Government of the Republic of Zimbabwe on February 24, 2020.
- The agreement under the LoC is effective from September 30, 2020.
Points to be Noted
Under this arrangement, financial assistance for the export of qualified goods and services from India, as defined under the Agreement, shall be permitted subject to export under India’s Foreign Trade Policy and whose purchase may be agreed to finance by Exim Bank under this Agreement.
Key Points
Contract Price
Of the total LoC by Exim Bank, goods, works and services valued at least 75% of the contract price will be supplied by the seller from India.
The Remaining 25% goods and services possibly procured by the seller from outside India for the purpose of an eligible contract.
Terminal utilization period
The terminal utilization period is 60 months, under the LoC, after the scheduled completion date of the project.
Export Declaration Form
As per the instructions issued by the Reserve Bank of India(RBI) from time to time, shipments under the LoC shall be declared in Export Declaration Form
Agency commission
Under this LoC, no agency commission is payable for export.
Although, if required the exporter can use his own resources or use the balance in his Exchange Earners’ Foreign Currency Account to pay commission in free foreign exchange.
After realising full eligible value of export subject to compliance with the extant instructions for payment of agency commission, the Authorised Dealer Category- I (AD Category- I) banks may allow such remittance
Note– All the directions mentioned are under section 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999) and are without prejudice to permissions/ approvals, if any, required under any other law.
Recent Related News:
On August 3rd, 2020 Export-Import (EXIM) Bank on behalf of Indian Government, extended a Line of Credit (LoC) of USD 250 million (about Rs. 1,870 Crores) to Mozambique to improve the power supply quality of the country.
About Export-Import (Exim) bank of India:
Managing Director(MD)– David Rasquinha
Headquarters – Mumbai, Maharashtra
About Republic of Zimbabwe:
Capital– Harare
Currency– Zimbabwean dollar
