India is considering making it easier for infrastructure firms to borrow overseas, but wider rules limiting the use of foreign loans are central to macroeconomic policy and will stay, a minister said on Tuesday.
In a bid to manage large inflows pouring into the country and fuelling a rise in the strength of the rupee, the central bank in August said local companies could only spend up to $20 million of external commercial borrowing at home.
Foreigners are pumping money into Indian stocks, about $17 billion so far this year, boosting the rupee and making it difficult for the central bank to manage the surplus cash.
"Large scale external commercial borrowings cannot be resorted to due to the overriding macroeconomic concerns of the government," Junior Finance Minister P.K. Bansal told the upper house of parliament in a written reply.
"But the government is examining the proposal of having a more liberal external commercial borrowing regime especially for infrastructure." He said the government was also encouraging the creation of infrastructure funds to cater to long-term financing needs.
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