Tuesday, October 15, 2013

Trade Credits for Import into India

The Reserve Bank has decided to allow companies in all sectors to avail of trade credit not exceeding
USD 20 million up to a maximum period of five years for import of capital goods. It has also been
decided to relax the ab-initio contract period of 15 months for all trade credits to 6 months. Banks
are, however, not permitted to issue Letters of Credit/guarantees/Letter of Undertaking (LoU) /
Letter of Comfort (LoC) in favour of overseas supplier, bank and financial institution for the
extended period beyond three years.

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