Indian companies are projected to raise $75-80 billion through external commercial borrowings (ECB) in FY27, driven by a Reserve Bank of India (RBI) scheme designed to boost dollar inflows, according to Neeraj Kumar, managing director and head of corporate banking for South Asia at Citibank. The projection is higher than the bank’s earlier estimate of up to $65 billion in FY27, from $50 billion in FY26.
According to Kumar, the projection was revised upward over the past two months after the RBI introduced measures in June allowing banks and public-sector companies to raise foreign-currency funds via ECBs and overseas foreign-currency borrowings (OFCBs) under a special window.
The central bank also set up a swap window for foreign currency non-resident bank—or FCNR(B)—deposits, allowing banks to gather dollar deposits at a lower effective cost. This swap window reduced dollar hedging costs for banks, allowing them to offer higher yield spreads to non-resident Indians while keeping their net funding costs manageable.
So far, India has garnered a total of $72.85 billion under the RBI’s special forex swap facility, led primarily by $65 billion in FCNR(B) deposits, $4.86 billion in OFCBs and $2.59 billion in ECBs, according to the latest RBI data. To be clear, the $2.59 billion figure reflects only the ECBs registered through this temporary window to date (8 June to 21 August), while the $75-80 billion figure represents total ECBs expected across all global market routes for the full fiscal year.
“People are raising ECBs. On top of it, what RBI has done for the FCNR(B) scheme, that has led to people raising more funds now,” Kumar said. “My sense is that around $75-80 billion should come,” Kumar said.
“We have already seen Indian banks raise over $4 billion through bond issuances and a comparable amount through loans. We expect $5-6 billion of additional bond and loan issuances through the rest of the year,” he added.
Banks have accelerated their fundraising plans following the RBI’s decision to move up the pre-closure deadline for the FCNR(B) scheme by a month. While the separate window for ECBs and OFCBs remains open until 31 December, fresh FCNR(B) deposits under the swap window are now permitted only through 31 August instead of the original 30 September deadline. “Investor appetite has held up well through this window, and in fact, we have seen bank spreads tighten to some extent after the early closure of the FCNR(B) window,” Kumar said.
Indian banks and public-sector units (PSUs) are expected to raise nearly $10 billion each through loans and bonds in FY27, according to Kumar. He added that two or three more lenders, including a mix of public- and private-sector banks, are likely to tap international markets soon. Since the announcement of the pre-closure, HDFC Bank, Axis Bank, ICICI Bank, Kotak Mahindra Bank and IDFC FIRST Bank have accessed the international bond market.
In a statement on 19 August, Citi said Indian banks have tapped the international bond markets actively over the past couple of months, raising cost-effective capital amid strong global investor demand. More than $4 billion has been raised through these transactions, with several issuances priced significantly tighter than their initial price guidance, it said.
“Some banks have also taken short-term funding for the moment. A one-year loan, for example,” Kumar said. Such borrowing gives lenders more time to decide on permanent funding structures, with some banks expected to replace short-term borrowings with three- or five-year funding once pricing is more attractive.
Beyond the funding market, Kumar said Citi is seeing a healthy pipeline of corporate activity, particularly in mergers and acquisitions, as stronger balance sheets improve companies’ capacity to pursue acquisitions, both in India and abroad. He said corporate and financial-sector balance sheets are at their healthiest levels in the past 10-15 years, giving companies greater capacity to invest in new projects and pursue strategic acquisitions.
“Corporate clients' ability and willingness is pretty strong,” Kumar said. He noted that Citi is seeing “very active conversations across sectors and geographies,” though he declined to estimate the M&A pipeline since early-stage discussions don’t always lead to deals.
While companies remain cautious about valuations, their willingness to examine overseas assets has increased, according to Kumar. This rise in corporate confidence is also evident in capital expenditure, which he noted has become significantly more broad-based than it was 18 months ago. Rather than concentrating capex in a handful of traditional industries, companies are now investing across semiconductors, data centers, renewable energy, electronics manufacturing, electric vehicles, metals and mining, infrastructure, and power, he said.
Citi’s institutional asset book has crossed ₹1 trillion, the bank said on 20 August. Over the past 12 months, Citibank said its India’s asset book grew by ₹24,000 crore.
Kumar noted that large projects are still being announced in infrastructure, ports, steel, cement and semiconductors, while long-gestation investments continue in sectors with strong structural demand. Power is emerging as another major area of investment as India expands manufacturing capacity and prepares for rapidly rising electricity demand.
