India's Aviation Sector Soars with Robust External Commercial Borrowings

India's External Commercial Borrowings (ECB) totaled USD 4.43 billion in December 2025, data from the Reserve Bank of India (RBI) reveals. This reflects a sustained infusion of foreign capital by Indian entities aiming to enhance capacity, develop new projects, and bolster balance sheets. A detailed review indicates that these funds were primarily directed towards importing capital goods, initiating new projects, upgrading facilities, and supporting on-lending activities.

The manufacturing, financial services, infrastructure, and transportation sectors represented a substantial proportion of these borrowings, highlighting ongoing investment initiatives across the economy. ECBs, which are loans acquired by Indian firms from overseas lenders in foreign currency or rupee-based bonds, facilitate capital expenditure, refinancing, and modernization needs under RBI's governed routes.

The data also spotlighted notable borrowings by Air India and IndiGo, emphasizing fleet expansion and aircraft acquisition amid rising passenger traffic and international travel growth. With a significant portion of these long-term ECBs tied to aircraft imports, aviation remains a leading driver of foreign currency borrowings. In December, Air India was among the top borrowers, securing USD 274.9 million through multiple ECB tranches for aircraft procurement as part of its ongoing transformation. InterGlobe Aviation, which operates IndiGo, raised USD 463.7 million across four tranches, continuing its strategy of leveraging offshore financing for aircraft acquisitions.