Due to the current economic conditions, outstanding payments in India are often delayed by several months. The Reserve Bank of India had already advised banks in the spring not to consider customers as defaulters if their customers defaulted on payments. Therefore, in recent months, many companies have started to adjust their contractual conditions and payment terms accordingly. We also advise our customers to do this in the interests of better liquidity planning.

That's why we recommend you, your Liquidity planning for India to update and in the process

• the possible extended payment receipts as well
• the status quo in wage payments

to simulate with.

If your Indian subsidiary still needs additional capital, you have the option Equity (Paid up share capital) to increase. If this is the height of the Authorized Share Capital has not yet reached this level, this can be supplied relatively easily. Otherwise, the process runs through the Ministry of Corporate Affairs (MCA) or the Registrar of Companies (ROC) and takes a correspondingly long time.

A financing via Borrowing is about so-called External Commercial Borrowings (ECB) possible. Read more about ECBs in particular and the financing options in general in this blog article.

But an important final remark: Due to Indian regulations, the issue of financing requires medium-term planning. A capital increase or financing “overnight” is generally not possible. Therefore, do your homework, i.e. liquidity planning, carefully and in good time. If you need support with this or want to take corporate action, contact our Finance & Compliance expert, Karsten Echle.