ANNOUNCEMENT 08 Nov 2013In November 2013, the government of India announced a change in the settlement of trade invoices.
NUMBER OF INTERVENTIONS
Reserve Bank of India notification
Amendment (4 February 2014)
On 8 November 2013, the Reserve Bank of India (RBI) liberalised the procedure for payments and receipts of internationally traded goods.
Earlier the payments for exports or imports had to be made by the original buyer/seller. The amendment allows these payments to be made through third parties provided certain conditions are fulfilled. Among other things, a firm irrevocable tri-partite agreement needs to be in place and such transfers can only be made with a Financial Action Task Force (FATF)-compliant country.
The amount of an import transaction eligible for such third party payments has been limited to USD 100,000.
On 4 February 2014, the RBI eased the requirement for presenting a "firm irrevocable tri-partite agreement" provided a documentary evidence leading to third party payments or the name of the third party being mentioned in the irrevocable invoice/order has been produced. Further, the limit of USD 100,000 for such transactions has been withdrawn.