(i) Import trade is regulated by the office of the Director General of Foreign Trade (DGFT) and its regional offices functioning under the Ministry of Commerce, Government of India. Policies and procedures for import are announced by the DGFT. Sale of foreign exchange or rupee transfer to non-resident account towards payment for import of goods into India from any foreign country, except Nepal and Bhutan, permitted under the prevailing import trade control policy may be made by authorised dealers without approval of Reserve Bank subject to the conditions set out in subsequent paragraphs.
NOTE: For Exchange Control purposes, accounts in India of Indians, Nepalese and Bhutanese resident in Nepal and Bhutan as well as Indian, Nepalese and Bhutanese firms, companies or other organisations including banks functioning in these countries are regarded as resident accounts and rupee transfers to such accounts against imports into India from these countries (or for any other purpose) may be made freely without reference to Reserve Bank. Sale of foreign currencies in payment for imports from the above countries is not permitted. Payments from India to suppliers in third countries against imports into Nepal/Bhutan are also not permitted.
(ii) Authorised dealers are permitted to open letters of credit on behalf of their customers who are known to be participating in the trade. While doing so, they should follow normal banking procedures, UCPDC provisions, etc. The letter of credit should, in particular, stipulate a condition requiring that the bill of lading should indicate the name and address of the importer in India as well as the authorised dealer opening the credit. Remittances for imports under letters of credit or otherwise should be made against shipping documents/lorry/railway receipts/Exchange Control copies of bills of entry/postal/courier wrappers, etc. except where it is otherwise provided in this Chapter.
(iii) In terms of item No.54 of the list of consumer goods given under paragraph 156 in Part II(A) of Chapter XV of Export and Import Policy (1992-97), import of designs and drawings is permitted without any restrictions. Remittances towards import of designs and drawings may be allowed by authorised dealers on production of (i) suppliers invoice; and (ii) postal wrappers/exchange control copy of Bill of Entry as documentary evidence in support of import, subject to the following conditions :-
a) Import of designs and drawings has been made strictly as per the Exim Policy in force.
b) The transaction is as per provisions of paragraphs 7A1(iii), 7A10, 7A11, 7A20, 7A21, 7A22 & 7A23 & 7A.26of ECM.
c) The entire payment relates to the cost of import of designs and drawings only and does not include any other cost.
d) Production of undertaking/certificate regarding payment of Income-tax (cf. Paragraph 3B.10).
e) The value of designs and drawings imported has been declared to the Customs authorities and incorporated in the Exchange Control copy of Bill of Entry.
f) In terms of Research and Development Cess Act, 1986 a Research and Development Cess has to be paid by Industrial concerns importing technology, drawings and designs, on all payments made by such concerns which will also include payments made locally in Rupees towards fare, living expenses etc. of foreign technicians/personnel who have been deputed to India in connection with the import of technology, drawings and designs. Authorised dealers should, therefore, while allowing such remittances, obtain confirmation/ evidence from the Indian companies that Research and Development Cess has been paid. In terms of Technology Department Board Act, l995 and amendment made to the R & D Cess Act, in 1995 by Government of India, the power of the Industrial Development Bank of India (IDBI) to call for information and impose penalty has been transferred to the newly constituted Technology Development Board. Accordingly, where such a confirmation/evidence is not produced by Indian companies, authorised dealers should immediately, but not later than 30 days from the date of remittance, report the matter to the Secretary, Technology Development Board, Technology Bhavan, Department of Science and Technology, Mehrauli Road, New Delhi 110 016 alongwith the following particulars.
i] Name and address of applicant industrial concern
ii] Name and address of the beneficiary
iii] Purpose of remittance(with brief details)
iv] Amount and currency of remittance
v] Date of remittance. Authorised dealers may also open letters of credit covering imports of designs and drawings subject to the above referred conditions and also subject to the applicants undertaking to produce documentary evidence of import within 3 months from the date of remittance.