Project Exports and Service Exports
6A.16 (i) Export of engineering goods on deferred payment terms and execution
of turnkey projects and civil construction contracts abroad are collectively
referred to as 'Project Exports'. Project export contracts are generally of
high value and exporters undertaking them are required to offer competitive
credit terms to be able to secure orders from foreign buyers in the face of
stiff international competition. Indian exporters offering deferred payment
terms to overseas buyers in respect of export of goods and those participating
in global tenders for undertaking turnkey/civil construction contracts abroad
require specific prior approval of Reserve Bank for credit terms to be offered,
third country imports and opening of liaison office. Regulations relating to
'Project Exports' and 'Service Exports' are laid down in the Memorandum on Project
Exports (PEM).
(ii) Pure supply contracts i.e. contracts for export of goods
where at least 90 per cent of the export value is realised within the prescribed
period i.e. six months from the date of shipment and the balance amount within
a maximum period of two years from the date of shipment, are not treated as
deferred payment exports, provided the exporter does not require/avail of any
funded or non-funded facility/ies for such exports from authorised dealers.
Exporters should, therefore, directly approach ECGC for appropriate cover and
Reserve Bank for approval of the terms of payment in accordance with the procedure
laid down in Memorandum PEM.
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