Credit Agreement with Myanmar
Indo-Myanmar Credit Agreement dated November 17, 2000 for US $ 15 million
The Government of India have extended a line of credit of US $ 15 million (US Dollar Fifteen Million only) to the Government of the Union of Myanmar under a credit agreement entered into between the two Governments on November 17, 2000. The credit will be available to the Government of the Union of Myanmar for import from India of capital goods of Indian manufacture, consultancy services and consumer durables as specified in the Annexure. The contents of the Annexure may be modified by way of additions, deletions, or substitutions from time to time as may be mutually agreed to between the two Governments. The credit will not cover third country imports. The export of goods from India and their import into Myanmar shall take place through normal commercial channels and will be subject to the laws and regulations in force in both the countries.
2. The broad
terms and conditions of the line of credit are as under:
a. All
export contracts under the line of credit will be subject to the approval of
the Government of India and the Government of Myanmar and shall contain a
clause to that effect. The contracts should be forwarded to the Ministry of
Finance, Department of Economic Affairs, Government of India, New Delhi, for
approval. The Government of Myanmar and the State Bank of India, New Delhi,
will be informed in respect of each approved contract by the Ministry of
Finance, Government of India.
b. The
credit of US $ 15 million will be available on f.o.b. (free on board) basis and
will cover 100 per cent value of the eligible goods to be exported from India.
The contracts should be expressed in US Dollars. Letters of credit should
specify that 100 per cent value shall be financed from the credit.
c. All
disbursements under the credit should be made under letters of credit opened by
banks in Myanmar only. All letters of credit shall be advised by banks in
Myanmar to the State Bank of India, New Delhi, for onward transmission to the
exporters either direct or through another bank in India, if any, nominated by
the exporter/s. Normal commercial practices followed in respect of advising
payments under letters of credit will be applicable. Further, all letters of
credit should be supported by a copy of the contract and should contain the
following reimbursement clause:
“Reimbursement
for 100 per cent of the f.o.b. value of the contract shall be provided by the
State Bank of India, New Delhi, from US $ 15 million credit extended by the
Government of India to the Government of Myanmar. The letter of credit is
negotiable after the State Bank of India has issued an advice that it is
operative.”
3. The
contracts to be financed under the credit agreement for items specified in
paragraph 1 of the Annexure should be signed and relative letters of credit
established by November 30, 2001. The terminal date for drawal of the full
amount under the credit has been fixed as November 30, 2002. In the case of
items specified in paragraph 2 of the Annexure, contracts should be signed,
letters of credit opened and the full amount be drawn on or before November 30,
2001. If the full amount of the loan is not drawn by the above dates, the
balance will be cancelled and the final instalment of the repayment to be made
by the Government of the Union of Myanmar shall be reduced accordingly, except
as may otherwise be agreed to by the Government of India.
4. Shipments
of goods covered by the credit agreement should be declared on GR/SDF Forms,
with a prominent superscription reading ‘Exports to Myanmar under credit
agreement dated November 17, 2000 between the Government of India and the
Government of the Union of Myanmar.’ The number and date of this circular
should also be recorded on the GR/SDF Forms in the space provided therefor. On
receipt of the full payment of the bills in the manner indicated above,
authorised dealers should certify duplicate copies of the relative GR/SDF Forms
and forward them to the concerned Regional Office of Reserve Bank of India in
the prescribed manner.
5. Ordinarily,
no agency commission shall be payable in respect of exports financed under the
line of credit. However, Reserve Bank may consider on merit, requests for
payment of commission upto a maximum extent of 5 per cent of the f.o.b. value
in respect of goods which require after sales service. In such cases,
commission will have to be paid in Myanmar by deduction from the invoice value
of the relevant shipment and the reimbursable amount will be 100 per cent of
the f.o.b. value minus the commission paid. Approval for payment of commission
should be obtained before the relevant shipment is effected.
6. Authorised
dealers may bring the contents of this circular to the notice of their
constituents engaged in exports to Myanmar.
7. The
directions contained in this circular have been issued under section 10(4) and
section 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999). Any
contravention or non-observance of these directions is subject to the penalties
prescribed under the Act.
Annexure
Nature of goods referred to in Indo-Myanmar
Credit Agreement of 2000
1. Capital goods (along with original spare
parts and accessories purchased with the capital goods and included in the
original contract).
2. Items eligible for coverage under this
credit also include consumer durables and consultancy services.