OVERSEAS BORROWING WINDOW FOR INDIA INC. OPENED FURTHER

In a bid to attract precious foreign exchange in the face of the global economic crisis, the Reserve Bank of India (RBI) in consultation with the Centre, has hiked the External Commercial Borrowing (ECB) limit for corporates. Corporates in the industrial and infrastructure sectors can raise up to $750 million or equivalent under the automatic route as against the present limit of $500 million or equivalent. Further, corporates in specified service sectors - hotel, hospital and software - can raise up to $200 million or equivalent under the automatic route as against the present limit of $100 million or equivalent. This is, however, 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). Further, infrastructure companies can import capital goods by utilising short-term credit (including buyers' credit / suppliers' credit) in the nature of 'bridge finance', under the approval route.
Corporates in the infrastructure sector can avail themselves of ECBs for 'interest during construction
(IDC) as a permissible end-use, under the automatic/ approval route, subject to the IDC being a part of project cost and is capitalised.