Borrowers in services sectors eligible to avail External Commercial Borrowings (ECB)

The External Commercial Borrowing (ECB) policy is constantly reviewed by the Government in consultation with Reserve Bank of India (RBI) to keep it in tune with the evolving macroeconomic situation, changing market conditions, sectoral requirements, the external sector and the lessons of experience.

Under the extant ECB guidelines, borrowers in the services sector are not eligible to avail ECB under the Automatic Route. Government has decided on 2nd June 2008 to allow entities in the service sector viz. hotels, hospitals and software companies to avail ECB up to USD 100 million, per financial year, for the purpose of import of capital goods under the Approval Route. All other aspects of ECB policy shall remain unchanged.

RBI has also clarified that the existing guidelines on trade credit, allowing companies including those in the services sector, to avail trade credit up to USD 20 million per import transaction, for a period less than 3 years, for import of capital goods, shall continue.

This amendment to ECB guidelines will come into force with immediate effect.






ECB Guidelines revision in May 2008 ...Click here
ECB Guidelines revision in May 2007 ...Click here
Special section on External Commercial Borrowings ...Click here

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