E-com exports can avail pre-, post-shipment credit, PCFC: India's DGFT

05 Sep '23

1 min read

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The Indian government recently clarified that existing guidelines already allow pre-shipment and post-shipment export credit and packing credit in foreign currency for e-commerce exports.
During stakeholder consultations, the government was told that a primary concern was the lack of financial support in the form of export credits for e-commerce exports.

The Indian government recently clarified that existing guidelines already allow pre-shipment and post-shipment export credit and packing credit in foreign currency (PCFC) for e-commerce exports.

The government has been conducting consultations with various stakeholders including industry representatives, exporters, and nodal departments to address outstanding issues related to e-commerce exports. One of the primary concerns raised was the lack of financial support in the form of export credits for e-commerce exports.

Upon consultation with the Reserve Bank of India (RBI), it was made clear that existing guidelines already allow for such export credits under the ‘Master Circular-Rupee/Foreign Currency Export Credit and Customer Service to Exporters’, the Directorate General of Foreign Trade (DGFT) said in a trade notice.

The notice is essentially an encouragement for banking and financial institutions to extend these credits to e-commerce exporters. Financial institutions are expected to offer these facilities based on extant guidelines issued by the RBI, DGFT said in a note.

With access to both pre-shipment and post-shipment credits, e-commerce exporters can better manage their operational cash flows, it noted.

The notice also provides a channel for e-commerce exporters to report any difficulties they may face in availing such export credits to DGFT.

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