External Commercial Borrowing (ECB) Policy – Rationalisation and Liberalization On a review of the current ECB policy, it has been decided, in consultation with the Government of India, to further rationalise and liberalize the ECB Policy as under : (i)

On a review of the current ECB policy, it has been decided, in consultation with the Government of India, to further rationalise and liberalize the ECB Policy as under :

(i) The limit for eligible borrowers to avail of ECB under the automatic route per financial year has been enhanced as follows:

1. corporates in real sector-industrial sector-infrastructure sector – USD 750 million or equivalent as against the present limit of USD 500 million or equivalent.

2. corporates in specified service sectors viz. hotel, hospital and software - USD 200 million or equivalent as against the present limit of USD 100 million or equivalent.

(ii) 'All eligible borrowers' have been permitted to avail of ECBs designated in INR from foreign equity holders, under the automatic/approval route, as the case may be, subject to compliance with extant ECB guidelines.

(iii) Corporate in the infrastructure sector can avail of ECBs for Interest During Construction (IDC) as a permissible end-use,under the automatic/approval route, as the case may be, subject to IDC being a part of project cost and is capitalized.

(iv) Considering the specific needs of the infrastructure sector, Indian companies which are in the infrastructure sector have been permitted to

1. utilise 25 per cent of the fresh ECB raised towards refinancing the Rupee loans availed by them from the domestic banking system, under the approval route, subject to the condition that at least 75 per cent of the fresh ECB proposed to be raised should be utilised for capital expenditure towards a 'new infrastructure' project(s), where “infrastructure” is as defined in terms of the extant guidelines on ECB; and

2. import capital goods by availing of short term credit (including buyers’ credit / suppliers’ credit)in the nature of 'bridge finance', under the approval route, subject to certain conditions.