Lok Sabha

The current overseas borrowing limit for Indian Companies, other than those belonging to Hotels, Hospitals and Software Sectors, incorporated under the Company's Act, 1956 is US$ 500 million per financial year for Rupee expenditure and / or foreign currency expenditure for permissible end-uses under the Automatic Route. Such corporate can also avail of ECB for an additional amount of US$ 250 million with an average maturity period of 10 years under the Approval Route subject to certain conditions.

ECB policy including the overall limit for overseas borrowing is reviewed regularly by the Government in consultation with RBI keeping it in line with the evolving macro-economic situation, changing market conditions, sectoral requirements, developments in the external sector and lessons of experience. Consequent upon such a review, the Government has announced certain modifications in ECB policy in January 2009, but no overseas borrowing limit has been increased as such.

This information was given by Minister of State for Finance, Shri Pawan Kumar Bansal in reply to a question raised by Shri P. Karunakaran in Lok Sabha today.

Overseas borrowing limits remain unchanged after policy review; approval route allows additional borrowing subject to conditions. The overseas borrowing limit for Indian companies (excluding hotels, hospitals and software) allows External Commercial Borrowings for rupee and foreign currency expenditure under an Automatic Route up to a prescribed ceiling per financial year, with an additional amount available under an Approval Route subject to conditions including an average maturity requirement; ECB policy and overall limits are reviewed regularly and were not increased in the January 2009 modifications.