Bids in foreign currency for projects to be executed in India – RBI relaxes
Person resident in India had been permitted to incur liability in foreign exchange and to make or receive payments in foreign exchange in respect of global bids where the Central Government has authorized such projects to be executed in India and the approval of the concerned Administrative Ministry has been obtained. In such cases, authorized dealers are permitted to sell foreign exchange to the resident Indian company which has been awarded the contract.
As a measure for procedural simplification, RBI has decided, in consultation with Government of India, that the prior permission of Administrative Ministry / Authorization from Central Government may not be necessary for International Competitive Bidding ( ICB ). Accordingly, persons resident in India are now permitted to incur liability in foreign exchange and to make or receive payments in foreign exchange in respect of global bids for projects to be executed in India without insisting on prior approval of the concerned Administrative Ministry for the International Competitive Bidding.
RBI Circular No. 39/ RBI ., Dated: April 28, 2008