Loans for Indian firms may get costlier as foreign banks turn selective

As local lenders struggle with mountains of NPAs grow pickier, borrowers are more reliant on international creditors

Indian firms have enjoyed the cheapest foreign-currency loan costs in more than a decade but may find the tides turning as banks become more selective.

That’s the view of Sandeep Bhatt, Mumbai-based senior regional manager for India at Export Development Canada, which has been active on Indian loans including major recent deals such as NatSteel Asia Pte, a unit of Tata Steel Ltd. spreads on investment-grade dollar loans for Indian borrowers may rise over the next six months, he said.

That adds to forecasts that the good days for many Indian companies in the offshore loan market may soon be