(i) Export of engineering goods on deferred payment terms and execution of turnkey projects and civil construction contracts abroad are collectively referred to as Project Exports. Project export contracts are generally of high value and exporters undertaking them are required to offer competitive credit terms to be able to secure orders from foreign buyers in the face of stiff international competition. Indian exporters offering deferred payment terms to overseas buyers in respect of export of goods and those participating in global tenders for undertaking turnkey/civil construction contracts abroad require specific prior approval of Reserve Bank for credit terms to be offered, third country imports and opening of liaison office. Regulations relating to Project Exports and Service Exports are laid down in the Memorandum on Project Exports (PEM).

(ii) Pure supply contracts i.e. contracts for export of goods where at least 90 per cent of the export value is realised within the prescribed period i.e. six months from the date of shipment and the balance amount within a maximum period of two years from the date of shipment, are not treated as deferred payment exports, provided the exporter does not require/avail of any funded or non-funded facility/ies for such exports from authorised dealers. Exporters should, therefore, directly approach ECGC for appropriate cover and Reserve Bank for approval of the terms of payment in accordance with the procedure laid down in Memorandum PEM.