Surge in foreign fund flow into infra

Surge in foreign fund flow into infra

Overseas investors are increasingly pumping money into India’s infrastructure sector, due to the prospects of high returns, an industry report said.

The flow of external commercial borrowings (ECBs), that include bank loans, suppliers’ and buyers’ credits, fixed and floating rate bonds and borrowings from private sector windows of multilateral financial institutions such as International Finance Corporation, surged 50 per cent to $36 billion in 2011 as compared to $24 billion in the previous year, as per RBI data.

“A closer look at the pattern reveals that the lion’s share in ECB is held by the infrastructure sector, contributing to about 80 percent of the total, which includes the telecom, power, oil and petroleum and iron and steel,” PHD Chamber said, adding, “The strong external funding can be attributed to high interest differentials available to foreign resources, vis-a-vis India, supported by high unexplored development opportunities in infrastructure within the country.”

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