The US Federal Reserve’s first rate hike in three years could change the borrowing calculus for Indian companies, prompting them to increasingly weigh domestic funding against external commercial borrowings (ECBs) as overseas borrowing costs rise. The Fed raised its target rate by 25 basis points to 3.75-4% and signalled that inflation remains elevated. US Treasury yields edged higher after the announcement, with markets factoring in further rate increases and the possibility of rates remaining “higher for longer”.