The RBI, has through A.P. (DIR Series) Circular No. 44 of 2011 increased the all-in-cost ceiling for trade credits for imports into India (available at http://www.rbi.org.in/scripts/BS_CircularIndexDisplay.aspx?Id=6812). The revised ceilings are 6 month LIBOR + 200 basis points for credits upto 1 year and 6 Month LIBOR + 350 basis points for credits between 1-3 years.
The rationale for increasing the ceiling is that importers are finding it difficult to raise credit within the existing limits.
The enhanced limits will be available till March 31, 2012 and is subject to revision thereafter.