The High level Co-ordination Committee on External Commercial Borrowing (ECB) has decided in principle to increase the annual indicative ceiling to $40 billion for 2010-11 from $35 billion last year.

 With this, Indian firms can now borrow up to $40 billion this year from overseas markets. This ensures easy availability of funds especially at a time when interest rates are expected to harden in the domestic market due to the RBI’s monetary tightening measures.

Infrastructure companies including those in the telecom sector could benefit from this.

The companies are allowed to access overseas debt on a first-come-first-served basis within the $40 billion limit. But actual borrowing in the year could exceed the $40 billion limit as some dollar funds can also come through the automatic route, where prior approval from RBI is not needed.