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M. Ramesh

For import of Maruti cars, Tata trucks, clinkers

Chennai , Sept. 19

Exim Bank of India has sanctioned a Rs 180-crore line of credit to two companies of the Dubai-based ETA group. Using the line of credit, the two companies will buy more of Maruti cars, Tata trucks and clinkers from a number of Indian companies.

ETA Star Auto Trade LLC, a subsidiary of ETA LLC, is a dealer of Maruti and Tata Motors in Sudan.

In 2005, the $114 m (Rs 500 crore) company imported 1,150 Maruti cars and 140 trucks of Tata Motors into Sudan. The company has been sanctioned a $20 million (Rs 90 crore) revolving line of credit.

ETA Star Auto believes there is a huge potential for Indian vehicles in Sudan and other African countries. According to Mr V.P. Nagarajan, Executive Director-Corporate Affairs, ETA, the company expects to import 3,000 cars and 1,000 trucks from India.

Another company of the ETA group, Star Cement Co. LLC, has been buying Indian clinkers for use in its own cement plants as well as for sales in West Asian market. `Star' is one of the leading brands in West Asia. In 2005, it sold over two million tonnes of cement in the UAE. The company bought clinkers worth about Rs 200 crore from India last year. Star Cement too has been sanctioned a $20 m LoC from Exim Bank.

More than facilitating exports of Indian products, the significance of the LoC lies in opening up of the Sudanese market, and eventually other African countries, to Indian products. Exim Bank of India has been actively lending for exports to Africa — according to Mr K. Muthukumaran, Chief General Manager, Exim Bank, about 85 per cent of the bank's 63 lines of credit for $11 billion, are for African buyers.

The lines of credit to ETA would help Indian companies to export to countries perceived as `high risk,' through the ETA group, Mr Muthukumaran said. The scope of LoCs could be extended when ETA adds more geographies in trade and the credit limits enhanced, in line with the demand for credit, he told Business Line on Tuesday.

Mr Nagarajan said that the Star Cement expected to use the revolving LoC three times over the next one year, and ETA Star Auto Trade, two times. Mr Nagarajan was all in praise for Exim Bank, which he said, not only initiated the deal, but also effected the sanction in a matter of days.

The $3-billion ETA group, short for Emirates Trading Agency is a joint venture of the Al Ghurair Group of UAE and Amana Investments Ltd (AIL) of Hong Kong. The latter was originally promoted by NRIs from Tamil Nadu, whose Indian associates include East Coast Construction Ltd, Crescent Engineering College in Chennai, Omega Cables and BITECH Computers.

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