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Introduction In Part 1 of this series, we discussed who can borrow and who can lend under the revised ECB framework. In Part 2, we examined how much Indian businesses can borrow, the applicable maturity requirements and the cost of borrowing. In this final part, we examine the most practical question in any ECB transaction: What can the borrower actually use the ECB funds for? This is where many ECB transactions become sensitive. A borrower may be eligible. The lender may be

Introduction In Part 1 of this series, we discussed how the revised ECB framework has widened the entry gate for Indian businesses by expanding the eligible borrower base and broadening the recognised lender framework. However, eligibility is only the first step. Once an Indian entity is eligible to raise External Commercial Borrowings, the next set of questions becomes equally important: How much can the entity borrow? For what period can it borrow? At what cost can it borro

External Commercial Borrowings, commonly known as ECBs, have always been an important route for Indian businesses to access foreign debt capital. For companies looking at expansion, manufacturing capacity, offshore acquisitions, infrastructure development, refinancing or group-level funding, ECBs can provide access to a wider lender base and, in some cases, more competitive financing. However, ECBs are not ordinary loans. They are regulated foreign borrowings governed by the

The Importance of Compliance in Foreign Exchange Regulations In criminal law, the golden rule is Actus non facit reum nisi mens rea sit rea—the act does not make a person guilty unless the mind is also guilty. But does this protection extend to the boardroom when dealing with foreign exchange violations? The answer, as analyzed in our latest deep-dive, is a resounding No. The Foreign Exchange Management Act, 1999 (FEMA), as an economic statute, operates on the principle of st