ECB or the External Commercial Borrowing is a tool for Indian companies to raise funds in foreign currencies from foreign lenders, for expansion and fresh investments.

ECBs or commercial loans in foreign currency can be in the form of bank loans, bonds, securitized instruments, buyers’ credit, and suppliers’ credit availed from non-resident lenders.  These borrowings have to comply with the applicable ECB guidelines/provisions contained in the Foreign Exchange Management (Borrowing and Lending in Foreign Exchange) Regulations, 2018, as amended from time to time.

As per the FEMA regulations on Borrowing and Lending in Foreign Exchange, certain borrowings are pre-approved by the government, while for certain others, specific approval from the Reserve Bank of India or the government, as applicable, is necessary.

The process is long, with lots of formalities, but that is where our role as your advisors and partners of growth begins.  With the experience and expertise of our team at ABV, we handhold you through the process, making the availing of ECB easier for you.

By availing of ECB, your company can diversify the investor base, without diluting control, at cheaper costs, thus increasing the profitability of your company.  Besides, it also provides global exposure to your company. On the macro level, the country as a whole is benefitted, as External Commercial Borrowing brings in foreign exchange, and directs the inflow to the sectors with a potential of growth.

There are decisions to be made about the best source (country or currency) of availing the finance, repayment terms, exchange rate risks, for which expert knowledge of national and international markets and laws of the land is of utmost importance.  Missing out on fine print can lead to severe consequences.  But with us as your partners of growth, you may rest assured that such glitches will not stall your project.