Policymakers need to carefully weigh the costs and benefits of foreign debt in the present economic circumstances. The stable domestic macroeconomic environment, upgrade in credit rating and the appetite for Indian paper in the global market are likely to enable more companies to raise dollar debt. The second view could be that increasing reliance on foreign sources for debt capital has risks. The inflow of a large amount of foreign debt could increase external liability, put pressure on the rupee and affect exports. The upshot: policymakers need to carefully weigh the costs and benefits of foreign debt in the present economic circumstances.

Source: Mint December 28, 2017 17:48 UTC