SCH II - Trade Credit for Imports [See Regulations 4(B)(ii) & 6(B)(iii)]

Foreign importers can raise trade credits up to $50 million per transaction under Schedule II regulations

The Foreign Exchange Management (Borrowing and Lending) Regulations, 2018 Schedule II permits importers to raise trade credits from outside India for importing capital and non-capital goods. Trade credits can be obtained in freely convertible foreign currencies or Indian Rupees up to $50 million per transaction. Maximum periods are one year for non-capital goods and three years for capital goods from shipment date. Recognized lenders include overseas suppliers, banks, financial institutions, and foreign equity holders. Foreign exchange credits have maximum spreads of 250 basis points over benchmarks, while Rupee credits follow market rates. Borrowers may provide security and guarantees as specified by Reserve Bank guidelines.