The government is actively deliberating a set of measures to boost foreign exchange inflows and ease pressure on India's forex reserves, sources have told NDTV Profit. One of the things under consideration is allowing state-run oil marketing companies to raise foreign currency loans directly from overseas markets, which is among the options under serious consideration.
The move, if implemented, would allow OMCs such as Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum to tap international debt markets directly for their funding needs, reducing their dependence on the domestic banking system and easing the strain on India's foreign exchange reserves at a time when elevated crude prices are significantly widening the current account deficit.
The measure is also expected to reduce borrowing costs for the state-run oil retailers, given that international borrowing rates may prove more competitive than current domestic alternatives.
The government is in active consultation with the Reserve Bank of India on a series of measures to improve forex flows, sources said. A tightening of the Liberalised Remittance Scheme, which currently allows resident individuals to remit up to $250,000 abroad per financial year, is also under deliberation as part of the broader effort to manage outflows.
The deliberations come against the backdrop of a severe energy shock triggered by the US-Iran conflict, which has pushed crude prices sharply higher and placed India's oil import bill and, by extension, its external account under significant stress. OMCs are already staring at a potential combined loss of Rs 1.2 lakh crore in Q1FY27 alone.
The government is contemplating a handful of measures in total to strengthen forex inflows, sources added.
ALSO READ: HPCL Is Buying More Russian Oil To Offset Rising Energy Costs
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.