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

[Asked by 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

Merchanting trade rules require export proceeds before import remittance and the same authorised dealer bank for both legs.
Merchanting trade occurs when an Indian intermediary arranges purchase from a seller in one foreign country and sale to a buyer in another without the goods entering the Domestic Tariff Area and without transformation. Only goods permitted under the Foreign Trade Policy may be used. The same Authorised Dealer bank must handle both import and export legs, observing KYC and AML requirements. Transactions must complete within nine months, have no foreign exchange outlay beyond four months, and export proceeds must be received before remittance for the import leg.