Hong Kong: Global bankers are sizing up India lending opportunities in the wake of new rules announced last Thursday which allow India borrowers greater access to overseas borrowings and, for the first time, yuan debt.
Indian companies are now allowed to borrow up to $750 million — previously $500 million — in external commercial borrowings (ECBs) each financial year without approval, refinance rupee debt with overseas borrowings, and collectively borrow $1 billion in yuan. There is an overall overseas borrowing cap of $30 billion per year. ECBs were previously permitted in dollars, euros, pounds and yen.
The types of lenders expected to expand their role in India offshore loan markets include certain Chinese banks, India-focused international lenders, and Indian banks with an offshore presence. Meanwhile, the introduction of yuan debt may also support Chinese imports into Asia’s third-largest economy.
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