India Inc's external borrowings drop to $1.3 billion in Jan

MUMBAI: Liberalisation of the ECB norms has failed to have an impact on inflow of capital from the overseas markets as the funds raised by India Inc from abroad dropped to $1.3 billion in January 2009.

According to the Reserve Bank figures released today, the external commercial borrowings (ECB) fell to $1.3 billion compared to $1.66 billion in December 2008. The ECB in November was $1.7 billion.

Of the total overseas borrowings, $ 764 millions were raised through automatic approval route and $ 572 million through approval route.

Among the major borrowers were Vodafone Essar South, Vodafone Essar Spacetel, Vodafone Essar Cellular, who raised $ 157 million, $ 184 million and $.95 million each for importing capital goods.

Among the 39 companies, which raised overseas funds, 19 borrowed funds for modernising and rupee expenditure and the rest for importing capital goods.

To give Indian companies flexibility in raising money as sources of funds were drying up as a fallout of the global economic crisis, the government had eased the overseas borrowing norms.

Now the companies are allowed to bring in up to $500 million raised abroad in the country for rupee or foreign currency expenditure under the automatic route.