Relaxation for Ship Imports: RBI Permits Advance Remittance up to USD 50 Million Without Bank Guarantee
RBI allows advance remittance up to USD 50 million for shipping vessel imports without a bank guarantee or SBLC, easing norms under FEMA.
The Reserve Bank of India (RBI) issued a Notification dated June 13, 2025, allowing importers to make advance remittances of up to USD 50 million for the import of shipping vessels without furnishing a bank guarantee or an unconditional, irrevocable standby Letter of Credit (SBLC).
The circular amends the operational interpretation of Para C.1.3.3 of the Master Direction – Import of Goods and Services, which governs sector-specific provisions for high-value imports such as aircraft, helicopters, and shipping vessels.
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Previously, while similar relaxations existed for entities importing aircraft under regulatory clearance, importers of ships were required to follow the general norms under Para C.1.1, which mandated guarantees for remittances exceeding USD 200,000, with limited exceptions up to USD 5 million.
With this notification, importers of shipping vessels can now remit up to USD 50 million in advance without bank guarantees, provided they meet the due diligence, documentation, and compliance conditions laid out in Para C.1.3.3. These include:
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- KYC and bona fide checks by Authorised Dealer (AD) Category-I banks,
- Payment is made directly to the overseas supplier’s account as per contractual terms.
- Submission of proof of import within six months (or three years for capital goods),
- Compliance with ORM and IDPMS guidelines.
The notification was issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999, reinforcing RBI's mandate to regulate foreign exchange transactions in the country. While the directive lifts a significant burden for importers in the shipping sector, it also reiterates the need for compliance with any other applicable laws.
This policy change is expected to facilitate faster and less cumbersome procurement of vessels, helping Indian shipping companies and maritime infrastructure providers enhance fleet capacity and competitiveness in global trade.
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