While debt funding has been the preferred mode of investment,
historically India has offered very few routes for offshore debt
investment into Indian entities. Over the last 18 – 24
months, the government and the exchange control regulator, the
Reserve Bank of India ("RBI") have been relaxing
regulatory norms around debt funding, especially overseas debt
funding. Recently, the regulatory regime for the external
commercial borrowings ("ECB") was overhauled in a
substantially liberalized manner1.
Background
The Monetary Policy Committee of the RBI on February 7, 2019
issued its 'Sixth Bi-monthly Monetary Policy Statement,
2018-19' and also issued the 'Statement on Developmental
and Regulatory Policies'2 The 'Statement on
Developmental and Regulatory Policies' ("RBI
Statement") has proposed a number of regulatory changes such
as permitting ECBs to be raised for refinancing rupee debt in
certain cases, removal of certain concentration norms, harmonizing
categories of
