ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

External Commercial BorrowingsSubscribe to External Commercial Borrowings

External Commercial Borrowings

External commercial borrowings have emerged in the past few years as one of the instruments preferred by Indian companies to raise debt. However, its growing share in the composition of the country’s external debt is a cause for concern for the economy as the exposure to interest rate and currency fluctuation increases.

Calm before the Storm?

It is generally believed that India is doing far better than most emerging market economies in these times of global economic turmoil. Emerging markets are facing capital flight, with large-scale outflows, especially since the second half of 2015, with the trend expected to continue in 2016. India has been less affected than others, but is clearly vulnerable due to the large number of Indian firms that are exposed to external borrowings, a weak rupee, a year or more of declining merchandise exports, falling corporate profitability, and stressed corporate balance sheets.
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