1. From New Framework to Practical Impact
RBI's Draft Foreign Exchange Management (Borrowing and
Lending) (Fourth Amendment) Regulations, 2025, issued under FEMA,
propose a major redesign of India's external commercial
borrowing (ECB) framework. The draft widens the pool of eligible
borrowers, ties borrowing limits to net worth, and shifts from
rigid all‑in‑cost ceilings to market‑linked
pricing, while retaining a negative list of end‑uses and
detailed reporting obligations. The article examines the structure
and policy underpinnings of these reforms; focuses on what they
mean in practice for borrowers, lenders and authorised dealer (AD)
banks, and how legal risk and enforcement experience should shape
compliance strategies.
