ECB entitlement for new projects

All infrastructure and greenfield projects	50% of the total project cost
Telecom Projects	upto 50% of the project cost (including license fees)

In the case of power projects, greater flexibility will be allowed, based on merits.

End - use

a) ECBs are to be utilised for foreign exchange costs of capital goods and services (on FOB and CIF basis).

Proceeds should be utilized at the earliest and corporates should comply with RBI's guidelines on parking ECBs outside till actual imports. RBI would be monitoring ECB proceeds parked outside.

However, in the case of infrastructure projects in the power, telecommunications and railway sectors, ECB can be utilised for project - related rupee expenditure. License fee payments would be an approved use of ECB in the telecom sector.

b) ECB proceeds may also be utilised for project - related rupee expenditure , as outlined above.

Proceeds must be brought into the country immediately.

However, under no circumstances, ECB proceeds will be utilised for :
i) investment in the stock market
ii) speculation in real estate

c) ECB may be raised to acquire ships/vessels from Indian shipyards

Proceeds from Bonds & FRN
Corporates who have raised ECB through Bond/ FRN issues are permitted to use the proceeds from the issue for project related rupee expenditure till actual import of capital equipments takes place or upto one year, whichever is less. Sanction of additional ECB to the company would be considered only after the company has certified through its statutory auditor that it has fully utilised the amount for import of the capital equipment and services.