The External Commercial Borrowing (ECB) policy is regularly 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 lessons of experience.

Consequent upon such a review, it has been decided to modify some aspects of the ECB policy as indicated below:

At present, borrowers in the services sector are not eligible to avail ECB under the automatic route. It has been decided that henceforth borrowers in the services sector viz hotels, hospitals and software companies may avail ECB upto US$ 100 million for import of capital goods under the approval route.

These amendments in the ECB Policy will come into force on the date of Notification of Regulations/directions issued by the Reserve Bank in this regard under the Foreign Exchange Management Act, 1999.

BSC/KW/MP/135/08

Services sector borrowers eligible for external commercial borrowings for import of capital goods under approval route upon regulatory notification. Borrowers in the services sector, specifically hotels, hospitals and software companies, are now permitted to obtain External Commercial Borrowings for the import of capital goods under the approval route rather than the automatic route, subject to a specified ceiling. This amendment takes effect upon issuance of regulatory notification or directions under the Foreign Exchange Management Act, 1999 and retains supervisory oversight through an approval requirement.