What changed
The per-project ceiling for remittances toward foreign consultancy services by Indian companies in the infrastructure sector has been raised from USD 1 million to USD 10 million. This liberalisation applies to projects in power, telecom, railways, roads, ports, industrial parks, and urban infrastructure. For all other consultancy services, the earlier USD 1 million limit remains unchanged.
What it means for you
Banks can now process larger consultancy remittances for infrastructure projects without seeking RBI approval, reducing turnaround time for clients. This gives lenders more flexibility in supporting large-scale infrastructure financing, as project sponsors can access foreign technical expertise more easily. The move signals RBI's intent to ease current account norms for priority sectors.
What you must do
- Update internal AML/KYC checks to handle higher-value remittances up to USD 10 million per project.
- Verify that the remittance is for a project falling within the defined infrastructure sectors.
- Ensure proper documentation of project details and bonafides before processing the remittance.
- Advise corporate clients about the enhanced limit and the sectors covered.
Who it affects
AD Category-I banks processing outward remittances, Indian companies executing infrastructure projects, Project finance and corporate banking teams
Does this circular apply to all consultancy services or only those for infrastructure projects?
The enhanced limit of USD 10 million per project applies only to consultancy services procured for infrastructure projects as defined in the circular. For all other consultancy services, the earlier limit of USD 1 million per project continues.
What sectors are covered under 'infrastructure' for this liberalised remittance?
The circular defines infrastructure as power, telecommunication, railways, road including bridges, sea port and airport, industrial parks, and urban infrastructure (water supply, sanitation and sewage projects).
Do banks need RBI approval for remittances above USD 1 million but within USD 10 million for these projects?
No, AD Category-I banks can allow such remittances up to USD 10 million per project after verifying the bonafides of the transaction, without prior RBI approval.