India increases credit for overseas expansions
The demand for credit by Indian businesses grew in 2004 faster than it has since the 1990s.
The Reserve Bank of India (RBI) says this is due mostly to growing demand for capital from big businesses like construction and manufacturing, although the demands for retail and consumer credit were also a factor.
Between April 2004 and January 2005, borrowing by large and medium-sized companies went up by Rs322 billion ($7 billion). This compares to Rs 17 billion the year before.
According to the RBI, much of this demand for credit came from Indian companies looking to expand overseas.
The demand came from manufacturers such as the makers of automobile parts as well as more usual sectors such as IT services and software suppliers.
The managing director of the ICICI Bank, Indian’s second largest, said that Indian companies are working on projects that will expand capacity by $45 billion and $50 billion dollars.