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Decoding Indian External Commercial Borrowing (ECB) Policy and Law

34 Pages Posted: 13 Sep 2012 Last revised: 16 Sep 2012

Himanshu Yadav

National Law University

Date Written: September 12, 2012


The paper studies the External Commercial Borrowing policy being followed by the Government of India in order to let the Indian entities access the foreign funds. The law governing foreign exchange is Foreign Exchange Management Act, 1999 but no express mention of the ECB instruments is there, though they involve foreign funds. The paper establishes the source of law for ECB and the relevant provisions of the act from where the RBI (Regulator of ECB) derives it powers for the same. An analytical approach has been made to gauge the aspects of the latest ECB policy (2012) as RBI tends to amend it from time to time via FEMA notifications and A.P.(DIR) and Master Policy circulars. The provisions of law and that of policy have been consolidated to present a framework for the investors where they can categorically relate their proposed ECB to the mode of arising the same within the framework of the extant guidelines.

Keywords: ECB, FEMA, Commercial Borrowings, Foreign Funds, Foreign Exchange, FCCB, FCEB, RBI

JEL Classification: E58, F31, K00, K22, K23

Suggested Citation

Yadav, Himanshu, Decoding Indian External Commercial Borrowing (ECB) Policy and Law (September 12, 2012). Available at SSRN: or

Himanshu Yadav (Contact Author)

National Law University ( email )

Jodhpur, Rajasthan 342001

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