FEMA – 032 – Dated:- 28-10-2003 – Export of Goods and Services – Project Exports Reserve Bank of IndiaExchange Control DepartmentCentral OfficeMumbai – 400 001 A.P.(DIR Series) Circular No.32 October 28, 2003 ToAll Authorised Dealers in Foreign Exchange Madam / Sirs, Export of Goods and Services – Project Exports Attention of Authorised Dealers is invited to Regulation 18 of Notification No.FEMA 23/2000-RB dated 3rd May 2000 viz. Foreign Exchange Management (Export of Goods and Services) Regulations, 2000 in terms of which export of goods or services on deferred payment terms or in execution of a turnkey project or a civil construction contract requires prior approval of the approving authority, which shall consider the proposal in accordance with the guidelines issued by Reserve Bank from time to time. 2. With a view to simplifying and rationalising procedures, the Memorandum of Instructions on Project and Service Exports (PEM) has been revised. A copy of the revised Memorandum is en
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Rs.50 crore for authorised dealers and Rs.200 crore for Exim Bank. Proposals in excess of Rs.200 crore in value were required to be cleared by the Working Group. Monetary limits for clearance of service export contracts have also been revised from Rs.5 crore for authorised dealers and Rs.10 crore for Exim Bank to USD 100 million uniformly for authorised dealers and Exim Bank. Service export contracts exceeding USD 100 million (revised from the present limit of Rs.10 crore) will need to be cleared by the Working Group. 2. Buyer s Credit Scheme of Exim Bank Authorisation granted to Exim Bank to extend Buyer s credit under its Buyer s Credit Scheme has been revised from Rs.50 crore to USD 20 million. 3. Periods of Deferred Credit Period for which deferred credit may be offered by the exporter was linked to the value and type of the contract. The period of deferred credit can now be determined by the exporter and his banker in mutual consultation on merits of each case and on the basis of
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n site offices have been delegated to authorised dealers subject to certain conditions. Hitherto, exporters were required to approach Reserve Bank for such permission. 6. Liaison Office At present, number of liaison offices which can be opened by the exporter is restricted to one in a country where more than one project export contract is executed. This restriction has been removed. Exporters can now be permitted by the approving authority viz. authorised dealer/Exim Bank/Working Group to open more than one liaison office in one country, if required. 7. Initial Remittance Remittance for meeting initial / mobilisation expenses from India in the absence of adequate advance payment or an overdraft / loan arrangement abroad by the exporter required approval of Reserve Bank where the amount of remittance exceeded 5 per cent of contract value and / or period of repatriation of such amount to India exceeded one year from the date of such remittance. Approving authority viz. authorised dealer/
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ird country imports approved by the approving authority while according post award clearance to the project export proposal and payment under such letters of credit should be made from out of the project receipts. Authorised dealers can now grant waiver for submission of the exchange control copy of the bill of entry subject to certain conditions where third country purchases are directly transported by the overseas supplier to the project site and for which payment is made under letter of credit opened in India. Exporters were earlier required to approach Reserve Bank for grant of such waiver. 9. Export of Equipment on Re-import Basis Export of equipment on re-import basis was being allowed by Reserve Bank and necessary GR approval was being accorded. Exporter was required to submit an undertaking that he will re-import the equipment or if sold abroad, repatriate the sale proceeds. The exporter will now be required to make an application to the authorised dealer for permission, citing
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bmitted on a half-yearly basis by the exporter to all the institutions constituting the Working Group and the concerned Regional Office of Reserve Bank through the exporter s bank. Such report may now be sent to the authority approving the project export contract and the concerned Regional Office of Reserve Bank. It will however, be necessary to forward the report to Exim Bank / ECGC also in all cases where their financial / non-financial assistance / risk cover has been obtained. In the case of project export proposals approved by the Working Group, the report in Form DPX 3 may be sent to Exim Bank, ECGC and the concerned Regional Office of Reserve Bank. The final DPX 3 report may clearly indicate the fact of completion of the project and full compliance with closing procedures laid down in para B.10 of the revised Memorandum. 12. Inter-Project Transfer of Funds Presently, copies of applications for inter-project transfer of funds together with the approval accorded by authorised deal
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required to be submitted to Reserve Bank. Such evidence will now be submitted to the authorised dealer who is monitoring the project. 14. Completion of Projects On completion of the Project, the exporter is required to submit a report giving full account of the various steps taken by him to Reserve Bank and all the members of the Working Group. Such report will now be sent within one month from the completion of the Project, by the exporter through his banker to the approving authority which had cleared the project export contract at the post award stage and in addition, to ECGC / Exim Bank if they have participatory interest in the facilities / risks. Where the project export proposal was cleared by the Working Group, the report may be sent to Exim Bank and ECGC. 15. Single Foreign Currency Account -Monitoring Exporter can maintain a single foreign currency account for more than one project being executed in the same country. He is however, required to submit project-wise statements
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ency Account in India Approving authority of the overseas contract i.e. Authorised Dealer/Exim Bank/Working Group can now allow project/service exporters to open, hold and maintain foreign currency account in India subject to certain terms and conditions. Hitherto, project/service exporters were required to approach Reserve Bank for permission to open such account in India. 18. Details of Site / Liaison Office, Payment of Agency Commission on Overseas Borrowings. The exporter may submit the following information/statements to the concerned authorised dealer which was hitherto being submitted to the regional office of Reserve Bank. Details regarding opening of liaison office/site office (expenses on these offices, closure of offices) etc. within 15 days from the date of opening of such office. Expenditure of site/liaison office within one month from the expiry of the relevant half year. The account number, name of the bank, etc. of over draft / loan account of the exporter within 15 day
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