FEMA Update No. 2

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The Update covers recent changes made in the Foreign Exchange Management (Borrowing and Lending) Regulations, 2018 by the Foreign Exchange Management (Borrowing and Lending) (First Amendment) Regulations, 2026.

Consolidating the External Commercial Borrowing (ECB) provisions, the latest amendment also makes significant modifications to eligibility criteria, end use restrictions, minimum maturity period, borrowing limits, minimum average maturity period, cost of borrowing, and reporting requirements, etc.

Thoroughly discussing the changes, the Update also provides relevant comments by the LKS Team dealing with laws relating to Foreign Exchange Management. According to the Team, the revised framework aligns more closely with global market practices and enhances the ability of Indian businesses to pursue diverse funding needs through offshore borrowing.