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Mauritius to get Rs4.2 Bn loan from India to procure ‘defence items’

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The Export-Import Bank of India (Exim Bank) has entered into an agreement for USD 100 million line of credit to Mauritius for the procurement of defence items from India.

The deal was disclosed in a circular by R. S. Amar, Chief General Manager of the Reserve Bank of India (RBI) dated August 12, 2021, ref: RBI/2021-2022/85A.P. (DIR Series) Circular No.09 to I Authorised Dealer Banks

According to the document of which NewsMoris has a copy, the agreement was signed on February 19, 2021.

Under the agreement, India will export eligible goods and services to Mauritius.

“Out of the total credit by Exim Bank under the agreement, goods, works and services of the value of at least 75 per cent of the contract price shall be supplied by the seller from India, and the remaining 25 per cent of goods and services may be procured by the seller for the purpose of the eligible contract from outside India,” the circular said.

The agreement under the LoC is effective from July 22, 2021 and the “terminal utilization period is 60 months after the scheduled completion date of the project.”

Section 4 of the circular states that No agency commission is payable for export under the above LoC.

“However, if required, the exporter may use his own resources or utilize balances in his Exchange Earners’ Foreign Currency Account for payment of commission in free foreign exchange. Authorised Dealer (AD) Category- I banks may allow such remittance after realization of full eligible value of export subject to compliance with the extant instructions for payment of agency commission.”

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