NEW DELHI • Indian firms have raised 8 per cent more through international syndicated loans this year, amid a turbulent market for global financing, as bankers show confidence in the world's fastest- growing major economy.

State-run oil company ONGC Videsh and Tata Steel have led US$11.5 billion (S$15.6 billion) of loan fundraising this year by Indian firms, compared to the US$2.4 billion in offshore bond offerings, data compiled by Bloomberg shows.

Lenders are seeking the lowest premium over benchmark rates to lend to Indian borrowers since 2008 and are charging them less than Chinese counterparts.

"There is significant interest in India, given the stability in the economy and a good supply of government-owned entities tapping the market," said Mr Yogesh Venkata chalam at Australia & New Zealand Banking Group. "A heightened sense of caution regarding China has also driven lenders to consider alternate markets such as India."

Year-on-year growth in Asia's third-largest economy rose in the first three months of the year to 7.9 per cent, while in China the pace of expansion slowed for a third consecutive quarter to 6.7 per cent.

Confidence in Indian Prime Minister Narendra Modi's plans for deregulation and a new bankruptcy law are also driving interest from foreign bankers.

Firms have to comply with more covenants while taking a loan, but it is cheaper and also gives leeway to borrowers to pay back the debt earlier, said ONGC Videsh, the largest Indian borrower in the foreign currency loan market this year.

"It's no surprise Indian companies are getting better rates," said its finance director Satpal Garg. "The entire world is looking at India in terms of growth and feels that India could take the place vacated by China."

BLOOMBERG