MOU with a foreign concern for business co-operation in Indi

Querist : Anonymous (Querist) 22 November 2009 This query is : Resolved
Dear Firends,

An Indian company plans to enter into a contract(MOU) with a foreign party. Under the MOU, the foreign party will procure order from overseas market and the Indian company will supply the goods to the foreign customers under tenders floated by those customers. Indian party directly bill to those customers and will get payment. Indian party will pay commission to the foreign counterpart.

My query is whether there is any implication of FEMA regulations Under the facts mentioned above or there is any permission required from RBI whether prior or after the entering into MOU.

In my opinon this transaction is within the purview of general permission granted by RBI. Views of the learned members are solicited.

Regards

P.C. Joshi

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A V Vishal (Expert) 22 November 2009
Joshi

You have not mentioned what goods will be supplied to the overseas customers, however, based on the facts and on case to case basis it has to be checked about the requirements under FEMA or any other law prevalent. Further, in order to export you need an IEC code from DGFT.

Querist : Anonymous (Querist) 22 November 2009
The goods are industrial cables and accessories..

Regards

Raj Kumar Makkad (Expert) 22 November 2009
Apart from getting IEC Code from Director General of Foreign Trade, you will have to seek permission under the requirement of FEMA for the goods you propose to export.

A V Vishal (Expert) 23 November 2009
Mr Makkad

FEMA is for financial transactions only.

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