NEW DELHI: Indian companies significantly scaled back plans to raise funds through external commercial borrowings (ECB) in March 2026, reflecting the impact of ongoing tensions in West Asia and volatility in global markets.
According to the latest Reserve Bank of India (RBI) data, firms submitted proposals for $5.43 billion in March 2026, down from $11.04 billion in the same month last year. However, the figure showed a marginal rise from $4.59 billion in February 2026.
Of the total proposals, $5.22 billion came under the automatic approval route, while $212 million (21.2 crore dollars) required specific approval.
Limited interest in new projects
Amid concerns over slowing capital expenditure, companies filed only 19 proposals for new projects, seeking $1.14 billion in foreign loans. Another $1.22 billion was proposed for refinancing existing ECB or rupee-denominated debt.
Several major companies approached the market for funds during the month. Rajasthan Part-1 Transmission proposed raising $750 million for new projects. Adani Transmission Step-One sought $500 million for refinancing old loans.
In the financial services space, IIFL Finance proposed $500 million from international markets. Indian Railway Finance Corporation (IRFC) and Bajaj Finance filed proposals for $391.6 million and $300 million respectively.
Rising costs deter borrowing
Borrowing costs in international markets have been rising steadily. The yield on the US 10-year Treasury bond has increased by 0.20 to 0.30 per cent in recent months, narrowing the gap between foreign and domestic borrowing costs. This has made overseas loans less attractive than before, leading companies to adopt a cautious approach.
RBI eases norms
The RBI has responded by relaxing some ECB guidelines in recent months. These include higher borrowing limits, greater flexibility in currency conversion, and allowing conversion of loans into non-debt instruments. The central bank has also permitted companies undergoing restructuring or insolvency proceedings to raise funds through ECB.
Market participants believe that if West Asia tensions and global uncertainty persist, the cost of foreign borrowing could rise further, potentially affecting corporate expansion plans and fresh investments. For now, Indian firms appear to be treading carefully.
