India's Rs 4,850 cr credit to Maldives needs 75% local sourcing: RBI

India's Rs 4,850 crore credit line for Maldives' development projects mandates that 75% of goods and services be sourced from India, according to an RBI circular. The agreement was signed between Exim Bank and the Government of Maldives.

India-Maldives Credit Line Mandates 75% Sourcing

The Government of India's Rs 4,850 crore supported credit line for development projects in the Maldives will require at least 75 per cent of the value of goods, works and services under eligible contracts to be supplied from India, according to a Reserve Bank of India circular issued on Wednesday.

The Export-Import Bank of India (Exim Bank) had entered into an agreement with the Government of Maldives on July 25, 2025, to provide the line of credit for financing various development projects in the island nation.

Under the agreement, Indian exporters and suppliers are expected to account for the bulk of procurement under projects financed through the facility. "Under this Agreement, goods, works and services of the value of at least 75% of the contract price (as may be applicable) shall be supplied by the Seller from India," the RBI circular said.

The remaining 25 per cent of goods and services can be procured from outside India for eligible contracts.

Terms and Conditions of the Credit Facility

The RBI said exports of eligible goods and services from India under the arrangement would be permitted subject to their eligibility under the government's Foreign Trade Policy and their approval for financing by Exim Bank.

The line of credit became effective on August 27, 2026. Individual credit agreements will be signed under the umbrella facility after projects are identified and approved, with each such credit carrying a minimum value of Rs 500 crore.

The last date for disbursement under individual projects will be 48 months after the scheduled completion date of the relevant contract.

The RBI also said shipments financed through the credit line will have to be declared through the Export Declaration Form or Shipping Bill in line with its existing instructions.

No agency commission will be payable for exports under the line of credit, though exporters can use their own resources or balances in Exchange Earners' Foreign Currency Accounts for such payments where required, subject to existing regulations.

The central bank has asked authorised dealer banks to inform their exporter clients about the facility and direct them to Exim Bank for further details. (ANI)

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