An overview of external commercial borrowings in India: Growth trends and emerging challenges

External Commercial Borrowings (ECBs) constitute a pivotal instrument of cross-border debt financing and have played a central role in shaping India’s capital account dynamics since the economic liberalisation of 1991. This paper provides a comprehensive descriptive review of ECB policy evolution, inflow trends, sectoral composition, and risk challenges spanning over three decades. Drawing on secondary data published by the Reserve Bank of India (RBI), the Ministry of Finance, and international databases, and employing trend analysis, compound annual growth rate (CAGR) computation, and descriptive tabulation, the study maps six distinct phases of ECB policy development. The descriptive evidence suggests a gradual shift from manufacturing-led borrowings in the early liberalisation era towards infrastructure and financial services dominance in recent years. The paper discusses persistent currency and rollover risks that characterise ECB dependence in a large emerging market context, and advances actionable policy recommendations aimed at enhancing the developmental efficacy of ECBs while safeguarding macroeconomic stability.