Rbi Go-Ahead For Indo-Romanian Counter Trade
The Reserve Bank of India (RBI) has decided to allow counter trade arrangements between India and Romania in which exports from India to Romania may precede Romanian imports into India.
Earlier, the RBI did not allow exports from India to precede imports from Romania.
As per the provisions of the exchange control manual of the Reserve Bank, counter trade proposals involving adjustment of value of goods imported against value of goods exported required that imports into India precede exports from the country.
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The overseas party had to maintain an escrow account in US dollars in India.
However, Indian parties involved in counter trade with Romania will now be allowed to let their exports to Romania precede their imports from that country.
They will be required to open and maintain US dollar escrow accounts with banks in Romania.
An escrow account is an account of a temporary nature which the party holds during the period of the transaction.
As per the Reserve Bank of India directive, the exporter should utilise the funds kept in the escrow accounts within a period of three months from the dates of credit to the accounts for import of goods from Romania into India.
The Reserve Bank of India will consider proposals from Indian exporters for counter trade arrangements with
Romanian parties along with applications for opening and maintenance of US dollar escrow accounts with Romanian banks.
Banks may forward such proposals received from Indian exporters to the concerned regional office of the Reserve
Bank of India under whose jurisdiction the exporter is situated.