Policy Circular No. 8 dated 28^th May 1998

Attention is invited to paragraph 6.13 of Handbook of Procedures  (Vol.1). It has been represented to this Directorate that there is no uniform practice with regard to the adoption of the exchange rate, which should be taken into account while ascertaining whether the EPCG holder has fulfilled the export obligation under the EPCG scheme. Moreover, the adoption of exchange rate available on the date of export leads to problem for monitoring as export obligation is spread over a period of time and shipment is made in different currencies.

It has, therefore, been decided that the export obligation under EPCG scheme shall be denominated in US$@ the rate of exchange prevailing on the date of issuance of EPCG licence except in cases where the entire imports and the entire exports are made in one foreign currency. The licensing authority, while issuing the licence, shall mention the exchange rate of US$ vis-�-vis major foreign currency on the reverse of the licence.

The export proceeds realised in any currency shall be converted, except in cases where the entire imports and the entire exports are made in one foreign currency, into US Dollars at the exchange rate prevailing on the date of issuance of EPCG licence which has been endorsed on the reverse of the licence with a view to ascertain whether export obligation has been fulfilled or not.

In respect of licences where the entire imports and the entire exports are made in one foreign currency then that currency would be taken into account for fulfillment of export obligation.

In respect of licenses, which have already been issued, the licensing authority shall examine the fulfillment of export obligation as per the above parameters.

This issues with the approval of DGFT.