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BW Businessworld

India Eases Overseas Debt Norms...

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On Thursday, the government had eased overseas borrowing rules for firms, raising the limit on the amount that a company can borrow abroad and repatriate to $50 million from $20 million.

It also allowed firms in the infrastructure sector to borrow $100 million from abroad, and raised the foreign institutional investment limit in government and corporate bonds to $5 billion and $3 billion, respectively.

Economists had said the steps would deepen India's debt markets and shore up the rupee.

A finance ministry statement said hotels, hospitals and software companies could avail themselves of overseas borrowings of up to $100 million to import capital goods under the approval route.

It said the amendments to the External Commercial Borrowing policy would be effective after the Reserve Bank of India (RBI) approval.

The statement said the changes in policy were made after consultation with the RBI to keep it in tune with evolving macro economic situation, changing market conditions and sectoral requirements.

The rupee climbed to its highest level in more than two weeks on Friday, and closed at 42.45/46 per dollar. It rose 0.8 percent from its previous close of 42.785/795, after the government relaxed overseas borrowing rules.