India Ex-Im Bank has extended a US$8mn line of credit to Port of Spain headquartered Republic Bank Ltd, to finance India’s exports to Trinidad & Tobago. An agreement to this effect was signed on March. This is the first ever letter of credit extended by India Ex-Im to Trinidad & Tobago.
Under the letter of credit to Republic Bank, importers from Trinidad & Tobago are required to make advance payment of 10% of contract value to the Indian exporters and the balance 90% of contract value would be reimbursed by India Ex-Im to the Indian exporters, upfront upon the shipment of goods. The credit period available to the importers is up to five years.
Republic Bank, with assets exceeding US$2bn, is the largest bank in the country and enjoys investment grade ratings. The bank has a large branch network and several subsidiary companies in sectors like home loans, merchant banking and commercial banking in the Caribbean region.
India’s exports to Trinidad & Tobago amounted to around US$23mn during 2002-03, registering a growth of 109% over the previous year’s exports of US$11mn. Primary and semi-finished iron and steel, drugs, pharmaceuticals and fine chemicals, non-basmati rice, computer software in physical form, machinery and instruments, manufactures of metals and ready-made garments were the principal items in India’s export basket to Trinidad & Tobago in 2002-03.
Trinidad & Tobago, the third largest economy in the Caribbean after Cuba and the Dominican Republic, is the largest economy in the Caricom (Caribbean Community), with a large population of Indian origin. The country represents an attractive market for Indian exporters and investors, of itself and, more so, as a springboard to the wider market of the Caribbean and the Americas. Examples would be textiles, pharmaceuticals, chemicals, while vehicle exports can find adequate market volume in the Trinidadian market itself.