Transitional Arrangements under Para 1.5 of Foreign Trade Policy, 2004-2009

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..... s have come to notice of this office that when a certain item is prohibited for export, exporters want to take advantage of Para 1.5 of FTP by putting up their contracts and Letters of Credit. In some cases, Letters of Credit presented by the exporter are Standby Letters of Credit and not Commercial Letters of Credit. 2. Your attention is invited to Para 1.5 of Foreign Trade Policy, 2004-2009 as .....

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..... . 4. It is also seen that standby letters of credit are not themselves the mode of payment, rather they are standby guarantees. The standby letters of credit guarantee payment of a specified amount, under stipulated conditions, however, the actual payment is not deducted from the amount of standby letter of credit but it is routed from some other account. 5. In view of the clear intention of T .....

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