The Export-Import Bank of India has extended a line of credit of US$10mn to Bank Gospodarstwa Krajowego (BGK), fully owned by government of Poland, to support India’s exports to Poland, which will be joining the European Union in May 2004.
Under the credit line to BGK, importers are required to make advance payment of 10% of contract value to Indian exporters and the balance 90% of contract value would be reimbursed by India Exim to Indian exporters, upfront upon shipment of goods. The credit period available to importers, through BGK is up to five years.
BGK, owned by the state treasury of Poland and established in 1924, is one of the largest Polish banks. BGK administers four government target funds and a number of governmental programmes. Apart from servicing governmental projects, BGK runs commercial activity using its own branches and offices.
India’s exports to Poland were US$104.24mn in 2002-03. Poland holds good potential for India’s export of pharmaceuticals and fine chemicals, readymades, cotton garments, vehicles, galvanic cells and batteries and manufactures of metals as also textile machinery. Availability of lines credit from India for export of goods and services will enhance the prospects of Indian companies securing contracts in Poland.