Indian Inc's ECB filings drop by 51% in March due to Middle East crisis; What it means for economy?

The Reserve Bank of India (RBI) in its latest data has shown that External Commercial Borrowing (ECB) filings by Indian companies, including non-banking financial companies (NBFCs), dropped 51% to $5.43 billion in March 2026 as compared to $11.04 billion in the same month of the previous year, owing to financial market volatility triggered by geopolitical tension in West Asia. However, the March 2026 filings were higher than the $4.59 billion recorded in February 2026.

According to data, out of the total, general permission accounted for $5.22 billion, while special permission filings stood at $212 million. It suggested that despite sluggish capital expenditure growth, there were 19 filings for new projects totalling a borrowing of $1.14 billion, and $1.22 billion were intended to refinance either existing ECB or rupee loans.

Among the prominent firms filing an intent in March 2026 with the RBI was Rajasthan Part I Transmission, which plans to raise for $750 million for a new project.

Earlier this year, the RBI issued liberalised ECB guidelines, whereby Indian companies can benefit from a higher borrowing limit at prevailing market-related conditions, change the currency of an ECB and convert the ECB into a non-debt instrument, among others. Further, a borrower under a restructuring scheme or corporate insolvency resolution process can tap this route to raise funds.

What does it mean?

External Commercial Borrowing (ECB) is just another tool for Indian corporate entities to raise money from. The route is used when the foreign exchange rate volatility is normal, and the interest rates abroad are affordable and predictable. A sharp drop in ECB filings by Indian companies indicates two important factors.

In the aftermath of the West Asia crisis, where crude oil remains at elevated levels, India Inc foresees poor aggregate demand, which leads to a delay in capex decision-making until the predictability comes in the crisis.

What next?

Though a 51% drop in foreign borrowing could be seen as a temporary blip, if the trend does not continue further. The domestic credit demand could rise even further as they shift to domestic banks for a financing route, as the domestic interest rate volatility remains certain. Investors should closely monitor the data to assess the private capex scenario in India Inc.

The strong public capex is generally complemented with equally strong private capex, which creates employment opportunities and thus has a “multiplier effect” on the broader economy.