Cross-Border Debt into India · Quick Reference

Structured Debt & ECB — Term Sheet

Plain-English glossary for foreign lenders · reflects the post-February 2026 ECB regime
One thread to remember: your headline coupon is not your real return. Withholding tax, treaty position and structure (onshore vs GIFT City) together set the net yield — model the after-tax number before choosing a route, not after.

I. Regulators & Framework

RBI Reserve Bank of India
India's central bank; main regulator for borrowing from abroad and FX.
SEBI Securities & Exchange Board of India
Markets regulator (akin to the UK's FCA). Oversees FPIs, bonds and shares.
FEMA Foreign Exchange Management Act, 1999
The overarching law for all cross-border money flows. Everything foreign sits under it.
IFSCA Int'l Financial Services Centres Authority
Single regulator for GIFT City / the IFSC.
AD Bank Authorised Dealer (Cat-I) Bank
RBI-licensed FX bank; the borrower's banker and the reporting gateway to the RBI.

II. Routes & Instruments

ECB External Commercial Borrowing
A loan an Indian entity takes from a lender outside India, under RBI rules.
FPI Foreign Portfolio Investor
A SEBI-registered foreign investor who buys Indian securities on the market.
NCD Non-Convertible Debenture
A bond/IOU that pays interest and repays at maturity — never converts to shares.
AIF Alternative Investment Fund
A SEBI-regulated onshore pooled fund. Only needed for an onshore INR presence.
SPV Special Purpose Vehicle
A company built for one purpose — to ring-fence a deal. Your Lux vehicle is one.
LRN Loan Registration Number
The RBI's unique ID for each ECB; no drawdown until allotted.
MAMP Minimum Average Maturity Period
Minimum average life before repayment (largely relaxed under the 2026 rules).

III. GIFT City

IFSC Int'l Financial Services Centre
A financial zone treated as "offshore" for FEMA; deals in foreign currency.
GIFT City
Gujarat Int'l Finance Tec-City — the only IFSC; a tax-friendly offshore-to-onshore bridge.
Tax holiday
Long tax exemption for GIFT funds — a key reason foreign credit players base there.

IV. Hedging

Hedging
Protecting against an adverse rate move; give up some upside for certainty.
FX / currency risk
The danger the USD/INR rate moves against you and you get back fewer dollars.
Forward
Locks in a future exchange rate today, for one set date.
CCS Cross-Currency Swap
Swaps interest and principal across two currencies over a loan's life.
POS Principal-Only Swap
Hedges only the final principal — cheaper, partial cover.
NDF Non-Deliverable Forward
Offshore INR forward, settled in dollars (no rupees move).
INR-denominated (Masala-style)
Borrowing in rupees, so FX risk sits with you, the lender, not the borrower.

V. Tax

WHT Withholding Tax
Tax deducted at source from your interest before you're paid; cuts net yield.
DTAA Tax Treaty
Two-country deal stopping double taxation; a good one lowers WHT.
Treaty shopping
Routing only to grab a better treaty, without real substance — disliked by authorities.
GAAR General Anti-Avoidance Rules
Lets India ignore a structure whose main purpose is dodging tax.
Substance
Real staff, decisions, operations — the defence against GAAR / treaty challenge.
PE Permanent Establishment
A taxable presence in India; lenders structure to avoid creating one.
Capital gains tax
Tax on profit when you sell paper above cost (matters if you trade, not just hold).

VI. Issuers in Play

BMCBrihanmumbai Municipal Corporation — Mumbai's city government (sub-sovereign).
PMCPune Municipal Corporation (sub-sovereign).
PFCPower Finance Corporation — government-owned lender to the power sector (quasi-sovereign PSU).
NHBNational Housing Bank — government-owned housing-finance institution (quasi-sovereign).