Export of Goods – Long Term Export Advances
May 28, 2014
Members of the Council,
Sub: Export of Goods – Long Term Export Advances
Please find enclosed the RBI Circular No.132 dated May 21, 2014 on the above subject. The highlights of the circular are as follows. ·
The sub-regulation (2) of Regulation 16 of the Foreign Exchange Management (Export of Goods and Services) Regulations, 2000, notified vide Notification No.FEMA.23/RB-2000, dated 3rd May 2000, as amended from time to time, states that prior approval of the Reserve Bank is required to be obtained by an exporter for receipt of advance where the export agreement provides for shipment of goods extending beyond the period of one year from the date of receipt of advance payment.
Further, in terms of A.P (DIR Series) Circular No.81 dated Feb.21, 2012 AD Category-I banks have been permitted to allow exporters to receive advance payment for export of goods which would take more than one year to manufacture and ship and where the export agreement provides for the same.
In view of requests received from exporters, it has been decided to permit AD Category-I banks to allow exporters having a minimum of three years satisfactory track record to receive long term export advance up to a maximum tenor of 10 years to be utilized for execution of long terms supply contracts for export of goods subject to the conditions as specified in circular No.132 dated May 21, 2014.
Copy of the circular No.132 dated May 21, 2014 is enclosed herewith.
Members may kindly note the above.
Thanks & regards,
R.Ramesh Kumar, IAS
COUNCIL FOR LEATHER EXPORTS