Reliance Industries (RIL) raised $487 million through external commercial borrowings (ECB), the highest amount among 81 companies which went for ECBs in June.

RIL borrowed the amount for a tenure of 13 years and five months for import of capital goods.

Besides, RIL, Uttam Galva Steels borrowed $180 million, the second largest amount, for refinancing of rupee loans. Both of these were done under the approval route.

In fact, during June 2013, 45 percent of the total ECB of $1.95 billion was for import of capital goods. This was followed by refinancing of old loans at around 14 percent and refinancing of rupee loans at around 10 percent.

While this could mean a large number of capital goods purchase is being done overseas, a worrying sign for the domestic capital goods industry, it also shows the foreign currency spend is mainly for capital expenditure.

During May 2013, firms borrowed $2.49 billion through ECB by automatic and approval route and this declined to $1.95 billion in June.

Flow of dollars through ECB is essential in the short term in order to meet the current account deficit (CAD), which is at a high of 4.8 percent of the GDP.

Besides ECB, foreign direct investment (FDI) would also help meet the rising CAD. The government has already liberalised FDI ceilings in various sectors.