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Date : 31 May 2005
Bids in foreign currency
8C.5

Bids in Foreign Currency for Projects
to be executed in India

 

8C.5

(i) In terms of the guidelines issued by the Government of India, where the Central

Government has authorised bidding procedures enabling Indian as well as foreign companies/entities to bid for the supply of goods and services, Indian bidders have been permitted to bid in any currency and receive amounts in such currencies as in the case of foreign bidders. In cases where such bids providing for payment in foreign currency are accepted from Indian bidders, it will be necessary for the Indian agency inviting the bid to make payment in foreign currency to the Indian bidders as also the Indian bidder to receive payment in foreign currency from the Indian agency. Reserve Bank has accordingly granted general permission vide its Notification No.FERA.l25/93-RB dated l5th January 1993, issued under Section 8(l) of FERA 1973, to persons resident in India to incur liability in foreign exchange and to make or to receive payments in foreign exchange in respect of global bids where the Central Government has authorised bidding procedure enabling Indian as well as foreign companies/entities to bid for the supply of goods and services for projects to be executed in India. To enable the concerned Indian companies to meet their financial obligations in foreign currencies in such cases, authorised dealers may sell foreign exchange to the concerned resident Indian company which has awarded the contract on verification of the Government authorisation and terms of the contract. The Indian bidder will also be entitled to receive payments in foreign currency in such cases which should be surrendered to an authorised dealer in foreign exchange in terms of paragraph 3A.4 of ECM. Authorised dealers may also treat such foreign currency receipts by the Indian bidders on par with remittances received from abroad and extend the facility of crediting the foreign currency receipts to their EEFC account in accordance with the instructions laid down in Part D of Chapter 14 of ECM.

 
 

(ii)

The following will constitute Government authorisation for the purpose:

     
   

(a)

Where foreign companies are permitted to bid for a project under a financing arrangement with a multilateral or bilateral institution and a certification to that effect has been given by the Indian agency or entity.

       
   

(b)

Where a bid is certified by an Administrative Ministry of the Government of India as one in which foreign companies/entities are permitted to bid as per guidelines specifically approved by the Department of Economic Affairs of the Ministry of Finance.

       
   

(c)

Where a certificate is issued by ONGC, OIL and GAIL in the case of global tenders floated by them in accordance with the guidelines issued by the Empowered Committee of Indigenisation of Oil fields equipment and services.

       
   

(d)

In all other cases, where specific authorisation has been issued by the Department of Economic Affairs of the Ministry of Finance.

       
 

(iii)

All foreign currency sales as stated in paragraph (i) above should be reported to

Reserve Bank on form A2, together with the copy of the Government authorisation.

 

Supply of Goods by one 100% EOU/EPZ Unit to another 100% EOU/EPZ Unit against payment in foreign exchange

 

8C.6

100% EOUs and units in EPZs have been permitted to sell goods manufactured by

 
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