Liberalization – Import and Export Regulations
|
Import and Export are the two direct measures to keep a balance between the inflow and outflow of the Foreign Exchange in any country. Foreign Exchange is the key element which swings any Economy significantly. In order to give a boost the flow of forex in India, the Regulators are on their way to improve the market sentiments and conditions by improvising and liberalizing the import and export procedures.
|
As a part of effort to decentralize operations and trade facilitation, which will be especially helpful at a time when the global economy is witnessing a slowdown, Reserve Bank of India vide A.P. (DIR Series) Circular No.81 & 82 dated 21st February, 2012 has brought the following amendments:
|
Export of Goods and Services – Receipt of advance payment for export of goods Involving shipment (manufacture and ship) beyond one year
|
As per the extant RBI guidelines, the exporters shall require the prior approval of the Reserve Bank where the export agreement provides for shipment of goods extending beyond the period of one year from the date of receipt of advance payment.
|
With the view to liberalization, the power has been delegated to AD category-I, to allow the exporters to receive the advance payment where the export agreement provides for shipment of goods extending beyond the period of one year from the date of receipt of advance payment subject to fulfillment of the conditions mentioned therein.
|
The above shall be subject to compliance of certain conditions like compliance with Anti Money Laundering standards, maximum cap on the payment of interest, if any, receipt of progress payments etc.
|
A very important condition that has been imposed is that in the event of the exporters inability to make the shipment, partly or fully, no remittance towards refund of unutilized portion of advance payment/ payment of interest should be made without prior approval of Reserve Bank.
|
- Release of Foreign Exchange for Imports – Further Liberalization
|
As per the extant RBI guidelines, the Importers are required to furnish Form A-1 for any payment exceeding USD 500 or its equivalent towards imports into India. Now as a measure of liberalization, RBI has revised said limit to USD 5000 or its equivalent, provided the payment is made by a Cheque drawn on the applicants bank account or by a Demand Draft. As per the amendment, the importers shall not be required to furnish any documents including Form A-1 except a simple letter from applicant stating the following particulars:
|
| 1. |
Name and the address of the applicant, |
| 2. |
Name and address of the beneficiary, |
| 3. |
Amount to be remitted |
| 4. |
Purpose of remittance |
|
