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• According to PHD Chamber, industry body, the international investors have been majorly investing into the Indian infrastructure sector, mainly in the power, oil and gas, telecom and iron and steel segments, due to the high returns prospects.The flow of external commercial borrowings (ECBs) that consist of bank loans, suppliers’ and buyers’ credits, fixed and floating rate bonds and borrowings from private sector windows of multilateral financial institutions like International Finance Corporation rose 50% to $36 billion during 2011 as against $24 billion in the previous year, according to the Reserve Bank of India data.
• A report from PHD Chamber, said, “A closer look at the pattern reveals that the lion’s share in ECB is held by the infrastructure sector, contributing to about 80 percent of the total, which includes the telecom, power, oil and petroleum and iron and steel. The strong external funding can be attributed to high interest differentials available to foreign resources, vis-a-vis India, supported by high unexplored development opportunities in infrastructure within the country.”Moreover, the external commercial borrowings are used as extra source of funds by private and public sector companies for financing expansion of the current capacity and also for fresh investment. These have become major source of funding for the development of the core sectors in India, mainly in the bad years when India had witnessed tight interest rate regimes due to the rising inflationary situations.

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