Reimagining Offshore Debt for India Inc.: Why Converting Euro Medium-Term Note (EMTN) Programmes into Global Medium-Term Note (GMTN) Platforms Is the Next Strategic Leap

Posted On - 24 November, 2025 • By - Rajesh Sivaswamy

Introduction

The offshore debt markets are undergoing a structural realignment. As global liquidity shifts across regions and new investor hubs emerge, Indian corporates are recalibrating how they access foreign capital. Historically, the Euro Medium-Term Note (EMTN) programme served as the primary gateway for Indian issuers tapping international bonds robust, respected, and aligned with European institutional norms.

But in today’s financing environment, Europe is only one part of a wider capital universe. The most competitive issuers now seek seamless access to the U.S. institutional market, the Middle East’s rising debt capital appetite, and Asia-Pacific’s expanding investor base. To operate effectively in this multi-market world, Indian companies are increasingly transitioning to the more versatile Global Medium-Term Note (GMTN) programme.

EMTNs: A Strong Foundation That No Longer Reflects Market Reality

EMTNs were built around the EU Prospectus Regulation and historically aligned well with European investment patterns. For a long time, this structure served Indian issuers adequately, especially those raising funds in Eurobond markets. However, the market has outgrown the boundaries of a region-specific structure.

  • Where EMTNs Now Show Their Limitations
  • Geographic concentration: Predominantly European investors
  • Limited U.S. reach: No direct Rule 144A capability
  • Constrained flexibility: Inefficient for multi-currency, bespoke, and hybrid structures
  • Emerging investor pools: Not naturally aligned with Middle Eastern or Asian preferences.

As Indian conglomerates evolve into global operators, the EMTN format increasingly feels like a well-built house in the wrong neighbourhood.

GMTNs: Creating a Borderless Financing Architecture for Indian Issuers

A GMTN programme, unlike an EMTN, is jurisdiction-agnostic. It is designed for issuances anywhere, in any major currency, under any commonly used governing law, and to any category of global investors from U.S. Qualified Institutional Buyers to Asian and Gulf sovereign funds.

What Makes GMTNs a Strategic Upgrade

  • True global reach: Reg S and Rule 144A in the same programme
  • Multi-currency agility: USD, EUR, GBP, SGD, JPY, CNH, AUD, etc.
  • Enhanced structuring: Suitable for senior, subordinated, perpetual, hybrid and ESG-linked issuances
  • Faster time-to-market: Issuers can respond instantly to favourable pricing windows
  • Investor diversification: Reduces concentration risk and expands credit visibility.

For Indian issuers, a GMTN is not merely broader, it is transformational.

The Indian Regulatory Environment (Updated to 23 November 2025)

1. The ECB Framework Remains the Governing Backbone

Despite the attention to the Draft ECB (Fourth Amendment) Regulations, 2025, the draft remains un-notified as of 23 November 2025.

Legal position: Existing ECB rules continue to apply.

Thus, all foreign currency bonds whether issued under an EMTN or GMTN are classified as External Commercial Borrowings (ECBs) under:

  • FEMA 3(R)
  • RBI’s Master Direction on ECBs
  • Applicable circulars and FAQs

Key ECB Requirements That Still Apply Today

  • Minimum Average Maturity (MAM) rules
  • All-in-cost ceilings
  • End-use restrictions, including prohibitions (real estate, capital market investments, on-lending)
  • Mandatory monthly ECB-2 filings
  • Prior AD Bank filing for every drawdown

Regardless of global governing law or listing, the Indian regulatory character of the issuance does not change.

2. The 2025 Draft Reforms: Important, But Not Yet Law

RBI’s 2025 draft reforms propose a more liberal regime:

  • Removal of all-in-cost ceilings
  • Linking borrowing capacity to net worth
  • Simplified end-use
  • Event-based reporting

But until notified in the Official Gazette, they remain aspirational, not actionable. Issuers must therefore structure GMTNs based on the current ECB framework while maintaining flexibility to absorb future liberalisation.

Re-Engineering the Debt Infrastructure: What EMTN → GMTN Conversion Involves

1. A Fresh Global Base Prospectus

GMTNs require a complete overhaul of offering documentation, including:

  • Multi-jurisdictional disclosures
  • U.S.-style risk factors
  • Comprehensive tax discussion
  • Expanded selling restrictions
  • FEMA/ECB compliance statements
  • This is not an update—it is a redesign.

2. Multi-Law Structuring

  • Regulation S tranches: English law
  • Rule 144A tranches: New York law (with trustee and indenture)

This dual-law structure significantly increases legal complexity and due diligence, but opens the door to the deepest global liquidity pool.

3. Upgraded Agency and Dealer Ecosystem

A GMTN typically requires:

  • Global paying agents
  • U.S. trustee
  • DTC, Euroclear, and Clearstream compatibility
  • An expanded international dealer syndicate.

This infrastructure allows an issuer to launch seamlessly into any market, at any time

4. Corporate Approvals and Indian Law Opinions

Indian issuers must update:

  • Borrowing limits
  • Board resolutions under Sections 179 & 180
  • FEMA-compliant security documents (if secured)

Indian counsel must certify:

  • corporate authority,
  • enforceability, and
  • compliance with ECB/FEMA requirements.

The Tax Landscape (As of November 2025)

1. Withholding Tax Rules

Section 194LC remains applicable, offering concessional withholding tax (typically 5%) for qualifying foreign currency bonds.

2. Global Tax Interaction: GMTNs often implicate:

  • treaty eligibility,
  • gross-up obligations,
  • cross-border investor tax exposure,
  • multi-jurisdictional tax disclosures.

Tax planning becomes integral to pricing and investor appetite.

Strategic Benefits for the Indian Corporate Sector

1. Positioning as Global Champions: A GMTN programme signals global readiness aligning disclosure and governance with international standards.
2. Reinforced Financial Agility: Issuers can tap whichever market is yielding the best terms at any moment, reducing refinancing risk and enhancing cost efficiency.
3. Diversified Credit Relationships: From U.S. pension funds to Middle Eastern sovereign pools, GMTNs allow Indian issuers to build relationships that extend beyond traditional Eurobond investors.
4. Future-Proofing Against Regulatory Change: By embedding flexibility in documentation, issuers can seamlessly absorb future ECB reforms once notified.

Conclusion: A Forward-Looking Framework for Global India

The conversion from an EMTN to a GMTN programme is far more than a technical transition, it is a strategic realignment of India’s global financing architecture. As of 23 November 2025, Indian issuers must continue to navigate the existing ECB and FEMA regime, but the move toward GMTNs positions them to capitalise on both today’s and tomorrow’s global opportunities.

At King Stubb & Kasiva, we see GMTN adoption as a defining step for Indian companies seeking to operate at global scale leveraging diverse capital pools, enhancing credit visibility, and embracing governance standards that resonate with international investors.

For Indian issuers seeking to shape the next chapter of global expansion, the GMTN programme is not simply an option, it is an imperative.