Date :  May 30, 2002

Indian Exporters allowed to receive Part ExportValue in Shares in Start-up Companies

It has been decided to permit Indian software exporters to receive equity upto 25 per cent of the value of their exports to overseas start-up companies that have initial liquidity constraints. Software exporters desirous of availing of this facility may approach the Reserve Bank of India through their authorised dealer for necessary permission. The decision has been taken with a view to strengthening the competitive advantage of Indian software exporters.

The Reserve Bank of India had been receiving representations from Indian software exporters to permit them, at their option, to receive a certain percentage of the value of their exports in the form of shares in overseas start-up companies that have initial liquidity constraints. Such equity acquisitions would be without entering into a joint venture agreement with the overseas entity, and are likely to help Indian exporters in getting long-term export orders.