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India’s external debt up 7.6% in end-2013-14: Govt

September 1: India’s external debt stood at $440.6 billion at the end of March 2014, up $31.2 billion or 7.6% over the level at the end of March 2013, a report by the Department of Economic Affairs said.

The report presents a detailed analysis of India’s external debt position in end-March 2014, based on the data released by the Reserve Bank of India on June 30, 2014. Apart from analysing trends, composition and debt service of India’s external debt, the report provides a comparative picture of India’s external debt vis-a-vis other developing countries.

A cross-country comparison based on “International Debt Statistics 2014” of the World Bank which presents the debt data for 2012, shows that India continues to be among the less vulnerable countries with its external debt indicators comparing well with other indebted developing countries.

India’s key debt indicators, especially debt to GNI and debt service ratios, continue to be comfortable.

The rise in external debt was due to long-term debt, particularly NRI deposits. The surge in NRI deposits reflected the impact of fresh FCNR(B) deposits mobilised under the swap scheme during September-November, 2013 to tide over the difficult BoP situation in the initial parts of the year, the report said.

In end-March, 2014, long-term external debt was $351.4 billion, showing an increase of 12.4% over the level in end-March, 2013. At this level, long-term external debt accounted for 79.7% of total external debt at end-March, 2014 as compared to 76.4% at end-March, 2013, it said.

According to the report, short-term external debt stood at $ 89.2 billion in end-March, 2014, showing a decline of 7.7% over $96.7 billion at end-March, 2013.

This owed to the compression in imports arising from the slowdown in aggregate demand and restrictions on gold imports. Thus, the share of short-term external debt in total external debt declined from 23.6% at end-March 2013 to 20.3% at end-March 2014, it said.

The report said the government’s (sovereign) external debt stood at $81.5 billion at end-March 2014 vis-a-vis $81.7 billion at end-March, 2013. The share of government external debt in total external debt was lower at 18.5% at end-March, 2014, compared to 19.9% at end-March, 2013.

The reported pointed that India’s external debt has remained within manageable limits as indicated by the external debt-GDP ratio of 23.3% and debt service ratio of 5.9% during 2013-14.

External debt of the country continues to be dominated by the long-term borrowings.

India’s external debt position in recent years is given below: