Will Indian firms now borrow more from abroad?

Last week, the Reserve Bank of India (RBI) announced measures to boost foreign capital inflows. One of these measures was to temporarily double the annual cap on the amount an Indian company can borrow from abroad to $1.5 billion without needing the RBI's approval. But will this result in a rise in external commercial borrowings? As per RBI data, the coronavirus pandemic led to a sharp drop in foreign loans taken by Indian companies in FY21 and FY22, with latest data showing external commercial borrowings worth just $362 million were taken in April under the automatic route. While the doubling of the cap may help, pre-pandemic levels are some way off.