Net foreign inflows through ECBs rise to $4.6B, RBI reports
What's the story
The net inflows of foreign funds through External Commercial Borrowings (ECBs) have jumped to $4.6 billion in the April-June quarter of FY26, according to data from the Reserve Bank of India (RBI). This is a significant increase from the $2.8 billion recorded during the same period last year. The RBI's monthly bulletin for August revealed that while ECB registrations slowed down in Q1FY26, inflows still exceeded outflows, leading to positive net inflows.
Registration slowdown
Decline in ECB registrations
The RBI data also showed a decline in ECB registrations, which fell to $9.1 billion in Q1FY26 from $11.1 billion in the same quarter last year. It further noted that funds raised through ECBs and initial public offerings (IPOs) for capital expenditure (capex) purposes were slightly lower than the previous quarter. This suggests a possible shift in funding strategies among corporations during this period.
Trend analysis
Manufacturing and infrastructure sectors lead in June filings
On a monthly basis, net inflows in June were just $0.2 billion, a sharp decline from $1.2 billion in May. The RBI data also showed that corporate entities from the manufacturing sector filed registrations for ECBs worth $954 million in June 2025, an increase from $603 million in June 2024. Meanwhile, firms from the infrastructure sector filed intentions worth $1.81 billion during this period, more than double compared to last year's figures of $808 million for the same month.
Sector performance
Services and NBFCs show decline
The services sector filed ECB intents worth $19 million in June 2025, a decline from last year's $37 million for the same month. Non-banking finance companies (NBFCs) filed ECBs worth $682 million during this period, significantly lower than last year's figure of $1.31 billion for June. These numbers suggest a varying impact on different sectors' borrowing patterns through the ECBs.
Rate increase
Pricing indicators for ECB loans
The weighted average margin over the alternative reference rate for ECBs was 1.70% in June 2025, up from May's 1.46% and last year's June's 1.36%. This pricing indicator applies to floating-rate loans. For fixed-rate loans, the interest rate range stood at 0-10.50% in June this year as opposed to a slightly higher range of 0-11% last year during the same month.