The Engineering Export Promotion Council (EEPC), apex body for engineering exporters, today said it has received representations from several members claiming that payments to the tune of over Rs 100 crore for shipments to Iran have been held up.
The lack of clear banking mechanism and channels have caused the problem, EEPC India said in a statement here.
"Under the Foreign Trade Policy, export proceeds in Iran can be treated at par with Foreign Convertible Currency (FCC). The modus operandi is through UCO Bank. The Indian banks are not handling payments or any form of commercial transaction and hence the UCO Bank was allowed to handle INR proceeds. But Iranians do not have Rupee balances but they are willing to pay in FCC," the EEPC India statement said.
As a result, the payments are held up and goods are detained at sea ports leading to demurrage and detention, it added.
Further, exporters run the risk of losing the money, as buyers may refuse to accept the cargo charges.
The EEPC India said the issue has been pending before the authorities for quite some time and discussions have also taken place at different levels.
"No solution has come about as yet. As a result, companies are not receiving their payment. It is estimated that over Rs 100 crore are pending for payment by the Iranians to Indian exporters," it noted.
It has suggested among other options that the UCO Bank should be allowed to accept FCC or euro from Iran and eBRC (electronic bank realisation certificate) be issued.
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