External Commercial Borrowings in India - An Overview

Abstract

ECBs in India are raised for the purpose of import of capital goods, new projects, modernization/expansion of existing production units in real sector, micro finance, refinancing old loans and on-lending to power sector. This access of Indian companies to international capital markets reflects the deepening of global financial markets, transformation of corporate financing, and strong inter-linkages across markets and greater exposure of firms to foreign currency exchange. It is agreed that liberalization of economies and greater asset diversification by international investors has increased the connection between Indian firms and international capital markets.