The Reserve Bank of India (RBI)
Wednesday, 13 Feb, relaxed norms for
imports of capital and non-capital goods by raising the trade credit limit to
USD 150 million under the automatic route.
the modified revised framework for 'Trade Credit Policy', the RBI, however,
reduced the all-inclusive cost (all-in-cost) for overseas loans to benchmark
rate plus 250 basis points from the earlier 350 bps.
credits (TCs) refer to the credits extended by the overseas supplier, bank,
financial institution and other permitted recognised lenders for maturity for
imports of capital and non-capital goods permissible.
to the revised framework, TCs up to USD 150
million or equivalent per import transaction
and gas refining & marketing, airline and shipping
companies can be availed under the automatic route.
others, the limit is up to USD 50 million or equivalent per import transaction.
under the automatic route, banks were permitted to approve trade credit up to
USD 20 million. TCs beyond USD 20
million were required approval from the RBI.
RBI said the revised framework comes into force with immediate effect.
includes rate of interest, other fees, expenses, charges, and guarantee fees.
Withholding tax payable in Indian currency is not part of all-in-cost.