New Delhi, Oct. 28 -- Sweeping relaxations by the Reserve Bank of India (RBI) on rules for Indian companies to borrow overseas may not trigger an immediate surge in such loans, as cheaper local loans and high hedging expenses dull the appeal of external commercial borrowings (ECBs).

The central bank earlier this month announced a major overhaul of the ECB norms, significantly raising the amount corporates can borrow, scrapping cost caps on ECB rates, and easing restrictions on how the funds can be used. The new draft framework aims to simplify accessing the overseas market, proposing measures like higher per-tranche limits and greater currency flexibility, including the conversion of rupee bonds to foreign currency and vice versa. ECBs a...