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ARTICLE · 27 APRIL 2026

External Commercial Borrowing Regime Revamped

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India's External Commercial Borrowing regulations have undergone significant amendments effective February 16, 2026, introducing substantial changes to pricing caps, end-use restrictions, and borrowing limits.

IndiaFinance and Banking
AZB & Partners
AZB & Partners
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The regulations on External Commercial Borrowings (‘ECB’) have, with effect from February 16, 2026, been significantly amended with the Notification of The Foreign Exchange Management (Borrowing and Lending) (First Amendment) Regulations, 2026 (‘Amended Regulations’). We set out below some key pointers on these latest changes to the ECB regime.

Key Changes to ECB Regime:

  1. Commencement and Applicability: The Amended Regulations come into effect from February 16, 2026. However, in respect of ECBs for which loan registration number (‘LRN’) was obtained before February 16, 2026, the old ECB regime continues to apply (except that reporting will be as per the Amended Regulations).
  2. All In Cost Cap No More Except for ECBs with Minimum Average Maturity Period (‘MAMP’) Less Than Three Years: Pricing must be in line with prevailing market conditions. Same for prepayment charges, penal interest, default interest. Pricing of ECB from a related party must be on arms’ length basis. For ECBs (to

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