India’s external debt grows 2.84pc to $558.5bn at March-end

While dollar debt is at 53.7pc; Re borrowings account for 32pc

MUMBAI: India’s external debt has grown by $15.4 billion or 2.84 per cent to $558.5 billion as of March end, 2020 compared with $543.1 billion a year ago, according to statistics released by the Reserve Bank of India (RBI).

US dollar denominated debt continued to be the largest component of India’s external debt, with a share of 53.7 per cent at end-March 2020, followed by the Indian rupee 31.9 per cent, yen (5.6 per cent), SDR (4.5 per cent) and the euro (3.5 per cent).

While the outstanding debt of general government decreased, from $103.8 billion to $100.9 billion during the period under review, that of non-government sector increased from $439.3 billion to $457.7 billion as of end-March 2020.

The share of outstanding debt of non-financial corporations in total external debt was the highest at 42 per cent, followed by deposit-taking corporations (except the central bank) (28.3 per cent), general government (18.1 per cent) and other financial corporations (7.5 per cent).

Valuation gains due to the appreciation of the US dollar vis-à-vis Indian rupee and other major currencies have been at $16.6 billion. RBI said that excluding the valuation effect, the increase in external debt would have been $32 billion instead of $15.4 billion at end-March 2020 over end-March 2019.

Commercial borrowings accounted for 39.4 per cent of external debt, whereas the non-resident (NR) deposits constituted 23.4 per cent, with short-term trade credit contributing 18.2 per cent to the external borrowing as of March end, 2020.

The long-term debt (with original maturity of above one year) was to the tune of $451.7 billion as of March end, recording an increase of $17 billion over the past one year to March end, 2020.

The share of short-term debt (with original maturity of up to one year) in total external debt declined marginally to 19.1 per cent at end-March 2020 from 20 per cent at end-March 2019.

At the same time, the ratio of short-term debt (original maturity) to foreign exchange reserves declined to 22.4 per cent at end-March 2020 (26.3 per cent at end-March 2019).

Short-term debt on residual maturity basis (i.e., debt obligations that include long-term debt by original maturity falling due over the next twelve months and short-term debt by original maturity) constituted 42.4 per cent of total external debt at end-March 2020, against 43.4 per cent at end-March 2019, and this stood at 49.5 per cent of foreign exchange reserves, substantially down from 57 per cent as of end-March 2019.

 

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