India’s external debt increased to $297.5 billion in December, up by 13.9 per cent from March 2010.

The debt, which included commercial borrowings and NRI deposits, was $261.2 billion at the end of March 2010.

“The long-term debt increased by $26.0 billion to $234.9 billion i.e. an increase of 12.5 per cent. The short-term debt showed an increase of $10.3 billion to $62.6 billion,” the Finance Ministry said in a statement.

Short-term debt (original maturity) accounted for 21 per cent of India’s total external debt while the remaining 79 per cent was long-term debt.

Of the total increase of $36.3 billion in external debt at end-December, the valuation effect arising from depreciation of the US dollar against major international currencies accounted for $5.3 billion (14.6 per cent).

“Excluding the valuation effect, the increase in external debt would have been $31.0 billion,” according to the Department of Economic Affairs’ quarterly statistics said.

Component-wise, the share of commercial borrowings stood highest at 28.5 per cent, followed by NRI deposits (17.0 per cent) and multilateral debt (16.0 per cent).

The government (Sovereign) external debt stood at $74.5 billion (25.0 per cent of total external debt) at end-December 2010, as against $67.1 billion (25.7 per cent) at end-March 2010.

The share of US dollar denominated debt was the highest in external debt stock at 53.7 per cent at end-December 2010, followed by the Indian rupee (19.0 per cent), Japanese Yen (12.0 per cent), SDR (9.7 per cent) and Euro (3.5 per cent).

India’s external debt to GDP ratio and debt service ratios stood at 16.9 per cent and 3.9 per cent, respectively, at end-December 2010.

The ratio of short-term external debt to foreign exchange reserves was 21.1 per cent at end-December 2010 compared to 18.8 per cent at end-March 2010.

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