BL Switching and payment settlements/ triangular shipments

[Nikhil Gupta]

Dear Sir

I would like to know some information regarding procedure under triangular shipment.

I receive order for some goods from a company based in UK, and i source the goods from china, to directly export to UK, and i do BL switch once the shipment is at china port.

I would like to understand how payment system works without bill of exchange being generated in India, as the shipment is going directly from china, and i take advance from uk company and pass on to china company now when final shipment is ready Uk company pays me balance amount and i forward the pending amount to china, so what about bill of exchange ? hwo it is handled or how the payment is settled in bank and rbi ?

regards

Nikhil

AI Summary

Bill of Exchange treatment in triangular shipments affects payment settlement mechanisms, bank processing and rbi compliance for balance payments. Question concerns payment and compliance where an Indian intermediary sources goods from China for direct export to a UK buyer, effects a bill-of-lading switch at origin, receives advance and balance payments from the UK buyer in India, and remits the supplier in China; the issue is whether a Bill of Exchange is required and how banks and RBI rules treat receipt and outward remittance in such triangular shipment arrangements.