For others, the limit is up to USD 50 million or equivalent per import transaction.
Mumbai: The Reserve Bank of India (RBI) Wednesday relaxed norms for imports of capital and non-capital goods by raising the trade credit limit to USD 150 million under the automatic route.
Announcing 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.
Trade 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.
According to the revised framework, TCs up to USD 150 million or equivalent per import transaction for oil and gas refining & marketing, airline and shipping companies can be availed under the automatic route.
For others, the limit is up to USD 50 million or equivalent per import transaction.
Earlier, 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.
The RBI said the revised framework comes into force with immediate effect.
All-in-cost includes rate of interest, other fees, expenses, charges, and guarantee fees. Withholding tax payable in Indian currency is not part of all-in-cost.
