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Merchanting trade transactions, Indian transactions goods

Merchanting Trade Transactions under FEMA

When an Indian transactions goods from one foreign country to another foreign country it is known as Merchanting transactions.

  1. What are the conditions that are required to be fulfilled for Merchanting trade transactions?
  2. The supplier of goods will be resident in one foreign country;
  3. The buyer of goods will be resident in another foreign country;
  • The merchant or the intermediary will be residents in India.
  1. What are the important guidelines that should be kept in mind while performing Merchanting Trade Transactions?
  1. Goods acquired shall not enter the Domestic Tariff Area.
  2. The state of goods should not undergo any transformation or any change.
  • The AD bank should be satisfied with the bonafide of the transactions. Further, KYC and AML guidelines should be kept in mind while handling such Merchanting Trade Transactions.
  1. The Merchanting Trading Transactions shall be undertaken for the goods that are allowed for exports/imports under the prevailing Foreign Trade Policy (FTP) of India.
  2. The entire Merchanting trading transactions shall be finished within an overall period of nine months and there shall not be any outlay of foreign exchange beyond four months.

Read Also:-  Investment by an Indian Outside Resident  |  How to INVESTMENT in India


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