The importer can deal with exporter on sight basis, negotiate a better discount and use the buyers credit route to avail financing.
The funding currency can be depending on the choice of the customer and availability of LIBOR rates in the exchange market.
Banks can provide buyer’s credit up to US$20 million (US$ 2 crore) per import transactions for a maximum maturity period of one year from date of shipment.
In case of import of capital goods, banks can approve buyer’s credits up to $20 million per transaction with a maturity period of up to three years.
RBI has issued directions under Sec 10(4) and Sec 11(1) of the Foreign Exchange Management Act, 1999, stating that authorized dealers may approve proposals received (in Form ECB) for short-term credit for financing—by way of either suppliers' credit or buyers' credit—of import of goods into India, based on uniform criteria.
All applications for short-term credit exceeding $20 million for any import transaction are to be forwarded to the Chief General Manager, Exchange Control Department, Reserve Bank of India, Central Office, External Commercial Borrowing (ECB) Division, Mumbai.