RBI's proposal on ECB likely to give realty sector a funding boost

Proposal allows External Commercial Borrowings for real-estate activities where FDI is permitted

If, in terms of a central-bank proposal, real-estate activities in which foreign direct investment (FDI) is permitted also get the benefit of external commercial borrowing (ECB), it will be a landmark shift — one that could reshape how Indian developers access and manage capital. 

 

By opening the door to offshore debt for construction and development projects, the draft framework is expected to ease long-standing funding constraints, lower borrowing costs, and revive stalled projects in the country.

 

For more than three decades, India’s real estate has remained cut off from external commercial borrowing, primarily due to concern around speculative land dealings