Can an Indian Manufacturer Have Warehouse Abroad, FEMA

[Prijesh J]

Experts...Need some insights.

Can an India Manufacturer have Warehouse Abroad where in the Agreement will be directly between the Manufacturer and Buyer.

Manufacturer will ship to his warehouse abroad and Buyer will pull in as per his requirements. Need to understand can buyer pay manufacturer based on his pulled quantity of FIFO basis. How should be the export documents be, should it reflect the buyer details also?

Thanks in advance.....

Posts / Replies

[Rajneesh Singhvi]

As per Master Circular on Export of Goods and Services issued by RBI clause B.14 i.e., Opening/ Hiring of Ware houses abroad, it is permitted to establish warehouse abroad.

AD Category – I banks may consider the applications received from exporters and grant permission for opening / hiring warehouses abroad subject to the following conditions:

1. Applicant’s export outstanding does not exceed 5 per cent of exports made during the previous financial year.
2. Applicant has a minimum export turnover of USD 100,000/- during the last financial year.
3. Period of realization should be as applicable.
4. All transactions should be routed through the designated branch of the AD Banks.
5. The above permission may be granted to the exporters initially for a period of one year and renewal may be considered subject to the applicant satisfying the requirement above.
6. AD Category – I banks granting such permission/approvals should maintain a proper record of the approvals granted.

Hence, it can be conluded that an Indian Manufacturer can have a warehouse abroad.

As far as the other part of the query is concerned, please advise about the step wise process which you wish to adopt so that I may clarify further.