RBI Regulations on Exports

							RBI Regulations on Exports

        S.Harikrishnan
        Deputy General Manager
         Reserve Bank of India
               Exports
Exemption from declaration- exports not
exceeding $ 25,000
Gift of goods upto Rs. 5 lakhs without
approval
GR waiver by Ads – upto 2% of the average
annual exports during preceding 3 years with
ceiling of Rs. 5 lakhs-For status holder
exports the upper limit is Rs. 10 lakhs or 2%
of annual realisation of exports whichever is
higher
   Status Holder redefined

Foreign Trade Policy 2004-2009 redefined the
status holders (based on export performance
of current + previous 3 years)
One Star Export House     -   Rs.   15 crore
Two Star Export House     -   Rs.   100 crore
Three Star Export House   -   Rs.   500 crore
Four Star Export House    -   Rs.   1500 crore
Five Star Export House    -   Rs.   5000 crore
Facilities for Star Export Houses

Authorisation/license/certificate/ permissions
and Custom clearances for both imports and
exports on self declaration basis
Exemption from compulsory negotiation of
documents through banks. The remittance
will be received through banks
100% retention of foreign exchange in EEFC
Enhancement of normal repatriation period
from 180 to 360 days
  International Credit Card

Overseas buyers are permitted to pay
through ICC during their visits to India

GR/SDF should be released by Ads only
on receipt of funds in their Nostro
Account
        Software exports
On site and off site contracts
100% repatriation of off site contracts
At least 30% repatriation of on site contracts
Balance 70% can be utilised for contract
related expenses
A duly audited yearly statement showing
receipts    under     off-site  and     on-site
undertaken, expenses and repatriation to be
sent to the AD
  RBI permission required

To acquire immovable property outside India
by Indian corportes who have set up
overseas offices (business or residential)
Counter trade proposal with Escrow account
Export of machinery, equipment etc on
lease/hire under agreement with overseas
lessee and ultimate reimport
Export on elongated terms
     General Permission

Participation in international trade-
opening temporary FC account-AD to
approve GR-exporters to produce Bill of
Entry within one month
Authorised Dealers’ obligations

Authorised Dealers may handle the
export documents submitted beyond 21
days without prior approval of RBI
Ensure that documents submitted do
not reveal any discrepancies in regard
to description of goods, value and
country
 Follow up of overdue bills

ADs to closely watch realisation of bills
Extension requests should be reported
to RBI
To submit XOS statement to RBI on half
yearly basis
 Reduction in invoice value
ADs can approve reduction in invoice value
after the bills is negotiated or sent for
collection
  Reduction should not exceed 10% of invoice value
  Exporter is not caution listed
  Exporter to be advised to surrender proportionate
  export incentives
Exporters of over 3 years of export business
may be permitted for write of without ceiling
provided the export outstanding does not
exceed 5% of the average annual realisation
during the preceding 3 years
             Self write off

All exporters permitted write off and
reduction of invoice value and extend the
period of realisation beyond 180 days
provided
  the aggregate value of such export bills written off
  does not exceed 10% of the export proceeds due
  during the calendar year and such export bills are
  not a subject of investigation by ED/CBI or any
  other agencies
        Extension of time
Exporters to submit the application through
the Authorised Dealer (Form ETX)
ADs are permitted to extend the period
beyond 6 months where the invoice value
does not exceed $1,00,000
Such extension may be grated for a period of
3 months at a time
When extension granted more than one year,
the total export outstanding should not be
more than 10% of the average of export
realisations during the preceding 3 financial
years
Imports
 Role of Authorised Dealers
May freely open LCs and allow remittances
for import of goods
To ensure that importers furnish evidence of
import
Remittances against imports to be completed
within six months
Deferred payment arrangements beyond six
months and upto 3 years will be considered
as trade credits
     Advance Remittance
ADs may permit advance remittance
  If the amount exceeds $ 1,00,000, an
  unconditional, irrevocable standby LC or a
  guarantee from an international bank or
  guarantee of an AD in India is obtained
  In case importer is unable to furnish a bank
  guarantee, the requirement may be waived for
  advance upto $ 1,000,000
  PSUs/Govt departments which is not in a position
  to obtain a guarantee, they are required to obtain
  a waiver from Ministry of Finance
Evidence of Import-AD’s obligation

Authorised Dealers to ensure in respect
of imports exceeding $ 100,000 that
  Importer submits Bill of Entry for home
  consumption or Bill of Entry for
  warehousing in case of 100% EOUs
  Importer submits Custom Assessment
  Certificate as declared by the importer to
  Customs Authorities
  No follow up for imports below $ 100,000
AD to acknowledge receipt of evidence of import EC
copy of Bill of Entry
Internal inspectors or auditors to verify the
documents evidencing import
Documents evidencing imports should be preserved
for a period of one year- if there is any investigation,
only with clearance from the investigating agencies
AD may accept either EC copy of BE or a certificate
from CEO or auditor of the company provided the
amount of foreign exchange remitted is less than $
1,000,000 and the importer is a company listed on
stock exchange in India and its networth is not less
than Rs. 100 cr.
Import Evidence-Follow up

If importer does not furnish documentary
evidence within 3 months involving foreign
exchange $ 100,000, the AD should
rigorously follow up in the next 3 months
AD to forward to RBI half yearly statement in
form BEF furnishing details of transactions
exceeding $ 100,000 where importer
defaulted in submission of document
evidencing import
        Risk Management
Forward contract permitted to hedge
exposure to exchange risk
Exporters and importers can book forward
contracts based on declaration
Maturity of the hedge not to exceed the
maturity of the underlying
Currency and tenor left to the choice of the
customer
Forward contracts booked to hedge current
account transactaions may be allowed to be
cancelled and re booked freely
Limit for forward contracts
Importers and exporters can book forward contract on
declaration basis based on past performance upto the average
of previous three years (financial year) actual import/export
turnover or the previous year’s actual import/export turnover
whichever is higher

Contracts booked in excess of 25% of the eligible limit will be
on deliverable basis and cannot be cancelled

AD may grant permission for the outstanding limit of (100%) of
contract

Amount of overdue bills should not be in excess of 10% of
turnover
         Export Credit

Pre Shipment credit
Post-shipment credit
Credit in foreign currency (PCFC)
Credit in rupees
Powers delegated to authorised dealers
to decide quantum of loan
Interest rate on export credit

Foreign currency credit
  Pre shipment credit – LIBOR+1% for 90 days
  Post shipment credit – LIBOR+1% for 90 days


Rupee credit
  Pre shipment credit – PLR-2.5% for 180 days
  Post shipment credit – PLR –2.5% for 90 days
   Exchange rate stability
     to help exporters
RBI endeavours to maintain stability in
exchange rate to help exporters

RBI intervenes in the market to avert
steep appreciation in rupee considering
the huge inflow of foreign currency
funds
      Thank You



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