Q. What effect would an increase in external commercial borrowings have on India's external debt?
Answer: It will increase
Notes: An increase in external commercial borrowings leads to a corresponding rise in the country's external debt. External commercial borrowings are essentially loans acquired by Indian entities from foreign sources. Any rise in such borrowings inflates the external debt directly. It is because, these borrowings add up to the total owed amount by the country to external or foreign entities, thereby increasing the external debt.