New Delhi, April 6 -- After years of marginal tweaks, the Reserve Bank of India (RBI) undertook one of the most consequential reforms in its External Commercial Borrowing (ECB) framework in February this year.

Over the decades, commercial loans raised by Indian resident entities have been regulated under tightly-controlled regimes, with caps on the quantum of annual borrowing, ceilings on interest spreads, prescriptive maturity conditions and rigid end-use norms.

The new framework, which raises borrowing limits and removes the all-in cost ceiling, represents a structural shift towards a calibrated and market-driven approach.

ECBs are an important source of funding for Indian corporates. According to RBI data, outstanding ECBs stood at ...