India’s External Debt Falls 3.6 Per Cent At September

At end-September 2018, India’s external debt witnessed a decline of 3.6 per cent over its level at end-March 2018, on account of a decrease in commercial borrowings and non-resident Indian (NRI) deposits.

At end-September 2018, country’s external debt was placed at $510.4 billion, recording a decrease of $ 19.3bn over its level at end-March 2018, said India’s central bank, Reserve Bank of India (RBI) on Monday (31).

The decrease in the magnitude of external debt was primarily due to valuation gains resulting from the appreciation of the dollar against the rupee and major currencies. The external debt to GDP ratio stood at 20.8 per cent at end-September 2018, higher than its level of 20.5 per cent at end-March 2018.

Valuation gains due to the appreciation of the dollar vis-à-vis the rupee and major currencies (viz., SDR, yen, euro, and pound sterling) were placed at $25.4bn. Excluding the valuation effect, the increase in external debt would have been $6.1bn instead of a decrease of $19.3bn at end-September 2018 over end-March 2018.

Commercial borrowings continued to be the largest component of external debt with a share of 37.1 per cent, followed by NRI deposits (23.9 per cent) and short-term trade credit (19.9 per cent).

At end-September 2018, long-term debt (with an original maturity of above one year) was placed at $406.1bn, recording a decline of $21.4bn over its level at end-March 2018.

Dollar-denominated debt continued to be the largest component of India’s external debt with a share of 49.7 per cent at end-September 2018, followed by the rupee (36.1 per cent), SDR (5.3 per cent), yen (4.7 per cent) and euro (3.2 per cent).

The borrower-wise classification shows that the outstanding debt of both government and non-government sectors decreased at end-September 2018, India’s central bank said.