RBI raises consultancy remittance limit for infra projects to USD 10 mn
Current · Source: Reserve Bank of India · RBI/2006-2007/367 · issued 30 Apr 2007 · ~2 min read
Quick answerRBI has increased the automatic remittance limit for consultancy services procured from abroad by Indian companies executing infrastructure projects from USD 1 million to USD 10 million per project. AD Category-I banks can now process these remittances without prior RBI approval, subject to verifying transaction bonafides.
The rule, in the simplest words
RBI increased the automatic remittance limit for consultancy services from USD 1 million to USD 10 million per project for Indian companies in infrastructure sectors.
AD Category-I banks can now process these remittances without prior RBI approval, subject to verifying transaction bonafides.
The remittance limit remains unchanged at USD 1 million for all other consultancy services.
How it plays out — a real example
A forex & trade-finance officer in Indore, Mr. Kumar, is working with a local infrastructure company that needs to hire a foreign consultant for a USD 50 million road project. Mr. Kumar can now process the consultancy remittance of up to USD 10 million without seeking RBI approval, after verifying the bonafides of the transaction and ensuring proper documentation of project details.
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
❓ Common questions
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.
📜 Read the original circular — full text as issued by RBI
RBI/2006-2007/367
A.
P. (DIR Series) Circular No.46
April
30, 2007
To,
All
Category - I Authorised Dealer Banks
Madam
/ Sir,
Foreign
Exchange Management Act (FEMA), 1999 – Current Account Transactions – Remittance
for consultancy services - Liberalisation
Attention
of Authorised Dealer Category-I (AD Category-I) banks is invited to Foreign Exchange
Management (Current Account Transactions) Rules, 2000 notified vide Notification
No. G.S.R.381(E) dated 4 th May 2000, as amended from time to time.
In terms of Rule 5 of the Foreign Exchange Management (Current Account Transactions)
Rules, 2000, prior approval of the Reserve Bank is required for drawing foreign
exchange ‘for remittance exceeding USD 1,000,000 per project, for any consultancy
service procured from outside India [item 15 of Schedule III to the Foreign Exchange
Management (Current Account Transactions) Rules, 2000].
2. As
announced in the Annual
Policy Statement for the year 2007-08 (para 146 (i) ii)) and with a view to
further liberalise the procedure and provide greater flexibility, it has been
decided to raise the limit for remittance for consultancy service procured from
outside India by Indian companies executing infrastructure projects from USD 1
million per project up to USD 10 million per project. For this purpose, infrastructure
sector is defined as (i) power, (ii) telecommunication, (iii) railways, (iv) road
including bridges, (v) sea port and airport, (vi) industrial parks, and (vii)
urban infrastructure (water supply, sanitation and sewage projects). Accordingly,
AD Category - I banks may allow remittances on behalf of Indian companies in such
cases up to USD 10 million per project, after verifying the bonafides of the transaction.
In all other cases, the existing limit of USD 1 million, per project, for any
consultancy service procured from outside India, will continue.
3. Necessary
amendments to Foreign Exchange Management (Current Account Transactions) Rules,
2000 are being notified separately.
4. AD
Category - I banks may bring the contents of this circular to the notice of their
constituents and customers concerned.
5. The
directions contained in this Circular have been issued under Section 10 (4) and
11 (1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and is without
prejudice to permissions / approvals, if any, required under any other law.
Yours faithfully,
(Salim
Gangadharan)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2006-2007/367 · issued 30 Apr 2007. The plain-English explanation above is BankPulse’s own independent summary.
Example: if you are a Compliance officer at a bank this circular applies to (AD Category-I banks processing outward remittances, Indian companies executing infrastructure projects, Project finance and corporate banking teams), your first concrete step on “RBI raises consultancy remittance limit for infra projects to USD 10 mn” is: “Update internal AML/KYC checks to handle higher-value remittances up to USD 10 million per project.” (RBI issued this 30 Apr 2007).
Circular: RBI/2006-2007/367 -- RBI raises consultancy remittance limit for infra projects to USD 10 mn
Issued: 30 Apr 2007
Action required: Update internal AML/KYC checks to handle higher-value remittances up to USD 10 million per project.
Action required: Verify that the remittance is for a project falling within the defined infrastructure sectors.
Action required: Ensure proper documentation of project details and bonafides before processing the remittance.
Action required: Advise corporate clients about the enhanced limit and the sectors covered.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
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BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=3475&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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