Forex Norms Relaxed For Exporters

The Reserve Bank of India (RBI) has imposed a ceiling on the interest to be paid by Indian exporters on advance payments received from overseas buyers at 100 basis points over Libor.

The RBI has further stipulated that shipments against which advance payments have been received, need to be monitored by the bank concerned in India and the shipments need to be made within a year from the date of receipt of advance payment.

The RBI has also stipulated terms under which remittance can be made towards the refund of advance payments when expor-ters are unable to make shipments against advances.

 

The liberalisation of exchange control regulations governing current account transactions follows the acceptance of the recommendations of a one-man committee appointed to review the rules relating to such transactions.

The Reserve Bank of India has allowed authorised dealers to remit up to $100,000 by Indian companies to overseas consultancy organisations that have conducted feasibility studies for projects to be set up abroad by proposed joint ventures or the wholly-owned subsidiary of the Indian company.

The RBI has also liberalised norms in areas including import of goods from a member country of the Asian Clearing Union through a supplier in a third country, refund of export proceeds, merchanting trade, release of exchange for medical treatment and check-up abroad, and claims against Indian tour operators and travel agents. Norms have also been relaxed for advance remittances for transactions other than imports, remittance of bonus to Indian nationals posted abroad, arrangements with overseas news services, hospitality to non-resident visitors and issue of foreign currency notes to foreign tourists or students against inward remittances.