Export to Outside India through Indian Merchant and getting funds in USD in sez

[Guest]

Dear Sirs

A - Manufacturer in Sez , B - Foreign Buyer , C - Trader in India.

Contract Received by C - Trader in India to supply goods to B for value 100 USD. C - Trader approached A manufacturer to export the goods directly to B - Foreign Buyer for this C will pay to A USD 90.

Shipping Bill Filed by A mentioned Buyer as ( C ) and Consignee as ( B) in USD. Commercial Invoice raised by A to C in USD send the documents from A Bank to C Bank in India. After receiving the documents in Trader Bank C he will substitute the Commercial Invoice and forward the same documents to Foreign Party B.

Foreign Pary B after receiving the documents at his bank remit the USD value 100 to Bank of ( C ). Bank of (C ) will transfer the USD 90 TO A.

As per RBI Guidelines and FEMA can we do this transaction. Is there any violation of FEMA. It is not deemed export. It is direct export. Kindly suggest sir.
Awaiting for your valuable response in this regard

AI Summary

Clarity Sought on Merchanting Trade: SEZ Transactions, RBI Guidelines, FEMA Compliance, and Routing Payments Through Same Bank A discussion on a forum addresses a query about a transaction involving an Indian trader, a foreign buyer, and a manufacturer in a Special Economic Zone (SEZ). The trader contracts the manufacturer to export goods directly to the foreign buyer, with the trader receiving payment from the buyer and remitting a portion to the manufacturer. The query seeks clarity on compliance with RBI guidelines and FEMA regulations. The response explains merchanting trade, emphasizing that goods should not enter the domestic tariff area and must comply with the Foreign Trade Policy. It highlights the need for adherence to KYC and AML guidelines and the importance of routing transactions through the same bank.