India’s External Debt Eases

India’s external debt has witnessed a decline of 1.6% to US$ 521.2 billion at end-December 2018 over its level at end-March 2018, on account of the decrease in commercial borrowings and trade credit. Further:

  • There had been a valuation gain in external debt as at end December 2018 due to the depreciation of the US dollar vis-a-vis the Indian rupee and other major currencies (viz., SDR, yen, euro, and pound sterling), were placed at US$ 20.6 billion.
  • If the valuation effect was excluded the external debt as at end December 2018 would have been US$ 541.8 billion.
  • Commercial borrowings were the largest component of external debt with a share of 37.4%, followed by NRI deposits (24.1%) and short term trade credit (19.9%).
  • The long-term debt (with an original maturity of above one year) was placed at US$ 417.3 billion at end-December 2018.
  • The share of long-term debt in total external debt at the end of December was 80.1%. It was lower than its level of 80.7% at the end of March 2018.
  • The share of short-term debt (with an original maturity of up to one year) in total external debt increased to 19.9% at end-December 2018 from 19.3% at end-March 2018.
  • US dollar denominated debt continued to be the largest component of India’s external debt with a share of 45.9% at end December 2018, followed by the Indian rupee (24.8%), SDR (5.1%), yen (4.9%) and euro (3.1%).

The outstanding debt of both government and non-government sectors had decreased at end-December 2018, in comparison to end-March 2018, however, increased in comparison to end-September 2018.