Role of EXIM Bank in International Business

Export-Import Bank of India

About Export-Import Bank of India The Export-Import Bank of India, also known as Exim Bank of India is the leading export finance institution in the country. The bank was set up in the year 1982 under the Export-Import Bank of India Act 1981. The Government of India launched the ExportImport Bank of India with an aim to augment exports from India and also to combine the country's foreign trade and investment with the overall economic growth. The bank began its operations as a supplier of export credit, but has over the period evolved into an institution that plays a major role in partnering Indian Industries including small and medium enterprises.

Export-Import Bank of India Initiatives

Export-Import Bank of India has been one of the prime institutions that encourage project exports from India. The bank offers wide-ranging services for enhancing the prospect of Indian project exports. Exim Bank's Overseas Investment Finance program gives a variety of facilities for Indian reserves and acquirements overseas. The facilities consist of direct equity participation by the bank in the overseas venture and non-funded activities by the overseas venture and loan to the Indian companies for equity participation in the venture abroad. As part of Exim Bank's marketing Finance Program, the bank offers support to small and medium enterprises in their export marketing efforts consisting of financing the soft expenditure linking to completion of tactical and systematic export market development plans.

Export-Import Bank of India Objective

The primary objective of the Export-Import Bank of India is to provide financial assistance to importers and exporters and function as the top financial institution. Some of the services of the bank include: overseas investment finance, film finance, export credit, finance for export oriented units and agricultural & SME finance. In the period of 2005- 2006 the total amount of loan given out by the bank amounted to 150,389 million, while this figure shot up to Rs. 220,760 million in the flowing year.

Export-Import Bank of India and Foreign Trade

Export-Import Bank of India plays the role of source of finance, promoter, coordinator and consultation to India's Foreign Trade. The bank is the coordinator of the Working Group Mechanism for the clearance of projects, service exports and deferred payment exports. This group comprises of Exim Bank and Government of India representatives from the Ministries of Finance, Commerce and external Affairs, Export Credit Guarantee Corporation of India Ltd, commercial banks that are certified foreign exchange dealers and the Reserve Bank of India. This working group gives clearance to contracts sponsored by Exim Bank or commercial banks and operates as a single window mechanism for clearance of export proposal terms.

Role of EXIM Bank of India in Foreign Investment

An Overview of EXIM Bank The main objective of Export-Import Bank (EXIM Bank) is to provide financial assistance to promote the export production in India. The financial assistance provided by the EXIM Bank widely includes the following: Direct financial assistance Foreign investment finance Term loaning options for export production and export development Pre-shipping credit Buyer's credit Lines of credit Reloaning facility Export bills rediscounting Refinance to commercial banks The Export-Import Bank also provides non-funded facility in the form of guarantees to the Indian exporters.

Various Stages of Exports Covered by EXIM Bank

Development of export makers Expansion of export production capacity Production for exports Financing post-shipment activities Export of manufactured goods Export of projects Export of technology and software

Forms of Financial Assistance Provided by EXIM Bank to Indian Companies

Delayed Payment Exports- Term loans are provided to those exporters who deal with exporting of goods and services and this enables them to offer delayed credit to the foreign buyers. This system of deferred credit covers Indian consultancies, technology, and other services. Commercial banks take part in this program either directly or under risk syndication arrangements. Pre-shipment credit- Indian companies which are highly involved in the execution of export activities beyond the cycle time of six months are funded by EXIM Bank. The construction or turnkey project exporters enjoy the provision of rupee mobilization. Term loans for export production- EXIM Bank offers term loans to the 100 percent export oriented units, units involved in free trade zones, and exporters of various software in India. EXIM bank also works in association with International Finance Corporation, Washington, to provide financial assistance to the small scale and medium industrial units in terms of ameliorating the export production capacity of these units in India. EXIM Bank also provides funded and non- funded facilities to deemed exports from India. Foreign Investment Finance- EXIM bank provides financial assistance for equity contribution to the Indian companies who form Joint Venture with the foreign companies. Financing export marketing- It helps the exporters carry out their export market development plan in Indian market.

Financial Assistance Provided by EXIM Bank to Overseas Companies

Foreign Buyer's Credit- the foreign players are entitled to a sum of financial assistance in order to import goods and services on deferred payments Lines of Credit- EXIM bank also offers financial assistance to the overseas financial institutions and various government agencies for import of goods and services from India. Reloaning Options to Foreign Banks- The foreign banks are entrusted with funding from EXIM bank in order to provide the same to the their clients across the globe for importing of goods from India.