In August 2022, RBI increased the limit of ECB that

Solution

As per ECB framework 2019, all eligible borrowers can raise ECBs up to USD 750 million or equivalent per financial year under the automatic route.    However in July 2022, RBI announced certain  “Liberalisation of Forex Flows”, in consultation with the Central Government, to:

•  increase the automatic route limit from USD 750 million or equivalent to USD 1.5 billion or equivalent.

• increase the all-in-cost ceiling for ECBs, by 100 bps. The enhanced all-in-cost ceiling shall be available only to eligible borrowers of investment grade rating from Indian Credit Rating Agencies (CRAs). Other eligible borrowers may raise ECB within the existing all-in-cost ceiling, as hitherto.