Subject

Amendments

Eligible borrowers

• Indian Limited Liability Partnership are newly included in the entities permitted to raise ECB.
• All entities eligible to receive foreign direct investments under the Indian FDI Policy would be eligible to raise ECB.

Eligible lenders

• Lender should be a resident of Financial Action Task Force or international organization of securities commissions compliant country.

Hybrid instruments

• Hybrid instruments, such as optionally convertible debentures, would be governed by separate hybrid instrument guidelines to be issued by the Indian Government.

Matters

Amendments

Restriction on the e-commerce marketplace entity

• The e-commerce marketplace entity or its group companies with equity participation or control on inventory of an e-commerce marketplace would not be permitted to sell their products on the platforms run by the e-commerce marketplace entity.
• Sellers on the e-commerce marketplace should not be mandated by the e-commerce marketplace entity to sell their products exclusively on its platform.

Control over inventory

• The e-commerce marketplace entity should not exercise control over the inventory, i.e., goods purported to be sold, since ownership or control over the inventory will result in the business being regarded as an "inventory based model," to which FDI is not permitted.
• If more than 25% of the purchases of a vendor are from the marketplace entity or its group companies, no FDI is allowed to the e-commerce entity as it will be deemed to have control over the inventory of the vendor.

Services by the e-commerce marketplace entity

• Services to be provided to vendors by an e-commerce marketplace entity or other entities in which the e-commerce marketplace entity has direct or indirect equity participation or common control should be at arm's length and in a fair and non-discriminatory manner to avoid potential assessment of noncompliance penalties.
• Cash back provided by group entities of the e-commerce marketplace entity to buyers must be fair and non-discriminatory to avoid potential assessment of noncompliance penalties.
• Provisions of services to any vendor on terms which are not made available to other vendors in similar circumstances would be deemed to be unfair and discriminatory to avoid potential assessment of noncompliance penalties.

Specific reporting requirement

• An e-commerce marketplace entity will be required to furnish a certificate with a report of a statutory auditor to the RBI by 30 September every financial year confirming compliance of the FDI guidelines.