ANNOUNCEMENT 06 Jun 2013In June 2013, the government of India announced a rule change for commercial cross-border financial flows.
NUMBER OF INTERVENTIONS
On 6 June 2013, the Indian Ministry of Commerce and Industry issued Notification No.16 (RE-2013)/2009-2014, thereby amending the payment policy for export of imported goods.
Earlier, goods imported with payments in freely convertible currency were permitted to be exported against payment only in freely convertible currency (in the same or substantially the same form). The new policy additionaly allows that for certain destination countries, exports of imported goods are permitted also against payments in Indian rupees, provided the Indian value added to the imported product exceeds 15%. The list of countries to which such a condition is applicable will be maintained by the Director General of Foreign Trade.
On 10 June 2013, the Notification No. 17 added Iran to the list of such countries.
Although the change provides better facilities to increase trade, it is restrictive in the sense of favouring certain countries over others.