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India’s external debt as at end-March 2016 witnessed a 2.2 per cent increase over its March 2015 level, primarily on account of a rise in outstanding Non-Resident Indian (NRI) deposits.
In absolute terms, India’s external debt at end-March 2016 stood at $485.6 billion, recording an increase of $10.6 billion over its level at end-March 2015.
The Reserve Bank of India said the increase in the magnitude of external debt was partly offset by valuation gain resulting from the appreciation of the US dollar vis-à-vis the rupee and other major currencies. The valuation gain was placed at $5.9 billion. Excluding the valuation effect, the increase in external debt would have been higher by $16.4 billion at end-March 2016 over the level at end-March 2015.
The external debt to GDP ratio stood at 23.7 per cent at end-March 2016, a shade lower than its level of 23.8 per cent at end-March 2015.
Commercial borrowings continued to be the largest component of external debt with a share of 37.3 per cent, followed by NRI deposits (26.1 per cent) and short-term trade credit (16.5 per cent).
In absolute terms, commercial borrowings and NRI deposits stood at $181.3 billion and $126.9 billion, respectively, as at March-end 2016. Short-term trade credit was at $80 billion.
As at March-end 2016, the share of short-term debt in total debt declined to 17.17 per cent from 18 per cent as at March-end 2015.
Similarly, the ratio of short-term debt (original maturity) to foreign exchange reserves declined to 23.1 per cent as at end-March 2016 (25 per cent as at end-March 2015).
On residual maturity basis, short-term debt constituted about 42.6 per cent of total external debt at end-March 2016 (38.2 per cent at end-March 2015) and stood at 57.4 per cent of total foreign exchange reserves (53.2 per cent at end-March 2015).
The RBI said the rise in short-term debt (residual maturity) mainly reflects payments due on account of maturing of FCNR(B) deposits mobilised under the special swap scheme in 2013.
Dollar-denominated debt continued to be the largest component of India’s external debt with a share of 57.1 per cent at end-March 2016, followed by the rupee (28.9 per cent), Special Drawing Rights (5.8 per cent), Japanese Yen (4.4 per cent) and the euro (2.5 per cent).
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