Under the Foreign Exchange Management (Guarantees) Regulations 2026 (FEMA Guarantee Regulations), a person resident outside India can issue guarantees in relation to external commercial borrowings (ECBs) and non-convertible debentures (NCDs) if such instruments are issued in accordance with FEMA. Under the Companies Act 2013, guarantees issued by a company may need approvals from the board of directors of the Indian entity and, in certain situations, shareholders of the Indian company. Furthermore, public companies (wither listed or unlisted) cannot issue guarantees for financing acquisition of their shares or their holding company shares.
Please click here to read the full article by Utsav Johri, Partner; Megha Upadhyay, Partner; and Devanshi Shukla, Associate, published in Lexology.
Megha is a Partner in the Finance practice of the firm. Her practice focuses on all types of debt transactions, including cross border finance, acquisition finance, structured finance, real estate finance, listed and unlisted corporate bond issuances and debt restructuring.