The Head/Principal Offices of all
Authorized Dealers in Foreign Exchange

Dear Sirs/Madam

Advance Payments against Imports

Attention of Authorized Dealers is invited to FE Circular No. 4 of 2005 in terms of which they are allowed to remit advance payment upto the amount of US$ 10,000/- or equivalent thereof in other foreign currencies per invoice against intended import of spare parts/consumables by manufacturing and industrial users, for their own use, without the requirement of L/c or Bank Guarantee from the supplier.

To further facilitate the importers, it has been decided to extend the scope of the above permission to all eligible import transactions upto a maximum of US$ 10,000/- or equivalent thereof in other foreign currencies, per invoice. Accordingly, Authorized Dealers are now allowed to process the requests of the importers for remittances upto a maximum of US$ 10,000/-, or equivalent thereof in other foreign currencies, on advance payment basis against all eligible import transactions after ensuring the bona-fides of the underlying import transaction and ensuring that related shipping documents are submitted to them by the importers within four months of the advance payment.

Please bring the above to the notice of all your constituents.