Recently RBI issued Notification No. FEMA.3(R)/2018-RB dated December 17, 2018 and made changes to the Trade Credit (Supplier’s Credit/Buyer’s Credit) framework. The circular covered borrowing & lending in foreign currency (including Trade Credit which is a type of borrowing in foreign currency). The changes effected were covered in Schedule II of the said circular.
Subsequently, RBI issued A.P. (DIR Series) Circular No. 23 dated March 13, 2019 and laid out the revised framework for Trade Credit in India. This revised policy replaces the existing Master Direction on Trade Credits with immediate effect.
This brings us to the pertinent question – what has changed? Our team at Myforexeye studied the two circulars and has consulted with few industry veterans and prepared a short summary for clients & other enthusiasts. The summary is for Trade Credit under the ‘automatic route’.
What has changed/been amended?
What is new?
What remains the same?
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