In a significant reform, the Reserve Bank of India (RBI) revamped its External Commercial Borrowing (ECB) framework in February 2024, allowing Indian entities greater access to global capital. The new rules increase the borrowing limit to $1 billion or 300% of a borrower's net worth, whichever is higher, and eliminate the previous all-in-cost ceiling on interest rates. This change reflects a shift towards a more market-driven approach, aimed at enhancing funding sources for capital-intensive projects. As of September 2024, outstanding ECBs totaled $190.4 billion, with the private sector responsible for about 63% of this amount. New ECB registrations also saw a sharp increase to $49.2 billion in 2023-24, compared to $26.6 billion in 2022-23. Despite this growth, the share of ECBs in relation to India's GDP has declined from 1.9% in 2019-20 to 1.2% in 2023-24, indicating that the economy is outgrowing its reliance on external borrowings. The RBI's decision to liberalize the ECB framework is seen as a confident recalibration of India’s external debt strategy, which stood at $717.9 billion as of December 2024, with ECBs comprising about 26% of this total. While the reforms provide opportunities for reduced financing costs and diversified funding, they also introduce risks related to exchange-rate volatility and global liquidity conditions. However, India's external debt remains manageable, with about two-thirds of outstanding ECBs hedged against currency fluctuations, showcasing improved risk management.