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Date : 27 Jun 2013
India’s External Debt end-March 2013

As per the standard practice, India's external debt statistics for the quarters ending March and June are released by the Reserve Bank of India and those for the quarters ending September and December by the Ministry of Finance, Government of India. The external debt data are released with a lag of one quarter. The external debt data, as compiled in the standard format, as at end-March 2013 in Rupees and US dollar terms and revised data for the earlier quarters are set out in Statements 1 and 2. The major developments relating to India’s external debt as at end-March 2013 are presented in the following paragraphs.

Highlights

The high current account deficit witnessed during 2012-13 and it’s financing increasingly through debt flows particularly by trade credit resulted in significant rise in India’s external debt during 2012-13. However, magnitude of increase in external debt was offset to some extent due to valuation change (gain) resulting from appreciation of US dollar against Indian rupee and other international currencies.

The major developments relating to India’s external debt as at end-March 2013 are set out below:

  1. India’s external debt, as at end-March 2013, was placed at US$ 390.0 billion showing an increase of US$ 44.6 billion or 12.9 per cent over the level at end-March 2012. The increase in total external debt during financial year 2012-13 was primarily on account of rise in short-term trade credit. There has been sizeable rise in external commercial borrowings (ECBs) and rupee denominated Non-resident Indian deposits as well.

  2. Excluding the valuation change (gain) due to the movement of US dollar (appreciation) against major international currencies and Indian rupee, the external debt as at end-March 2013 would have increased by US $ 55.8 billion over end-March 2012.

  3. In terms of major components, the share of external commercial borrowings continued to be the highest at 31.0 per cent of total external debt, followed by short term debt (24.8 per cent) and NRI deposits (18.2 per cent).

  4. The share of short-term debt in total debt, by original maturity, was 24.8 per cent. Based on residual maturity, short-term debt accounted for 44.2 per cent of the total external debt as at end-March 2013. Of this, the share of NRI deposits was 28.4 per cent.

  5. The ratio of short-term debt (original maturity) to foreign exchange reserves rose to 33.1 per cent as at end-March 2013 from 26.6 per cent as at end-March 2012.

  6. The debt denominated in US dollar continued to account for the highest share of 57.2 per cent in total external debt as at end-March 2013, followed by that denominated in Indian rupee (24.0 per cent) and SDR (7.5 per cent).

  7. The ratio of foreign exchange reserves to external debt as at end-March 2013 at 74.9 per cent was lower than the level of end-March 2012 (85.2 per cent).

1. India’s External Debt as at end-March 2013

  1. India’s external debt, as at end-March 2013, was placed at US$ 390.0 billion showing an increase of US$ 44.6 billion or 12.9 per cent over the end-March 2012 level, primarily on account of short-term trade credit, ECB and NRI deposits (Table 1).

  2. The share of short-term debt in total debt rose over the preceding as well as corresponding quarter of the previous year. The long-term debt at US$ 293.4 billion and short-term debt at US$ 96.7 billion accounted for 75.2 per cent and 24.8 per cent, respectively, of the total external debt as at end-March 2013 (Table 1).

  3. The share of external commercial borrowings (US$ 120.9 billion) continued to be the highest at 31.0 per cent of total external debt, followed by short term debt (24.8 per cent) and NRI deposits at (18.2 per cent).

2. Valuation Changes

The valuation change (gain) during 2012-13 amounted to US$ 11.3 billion reflecting the appreciation of US dollar against the Indian rupee and other major currencies. Thus excluding the valuation gain, the stock of external debt as at end-March 2013 would have increased by US$ 55.8 billion.

Table 1: External Debt by Component

(US $ million)

End- March

Item

1991

2007

2008

2009

2010

2011 R

2012 PR

2013 P

1

2

3

4

5

6

7

8

9

1. Multilateral

20,900

35,337

39,490

39,538

42,857

48,475

50,453

51,642

 

(24.9)

(20.5)

(17.6)

(17.6)

(16.4)

(15.8)

(14.6)

(13.2)

2. Bilateral

14,168

16,065

19,708

20,610

22,593

25,712

26,888

25,065

 

(16.9)

(9.3)

(8.8)

(9.2)

(8.7)

(8.4)

(7.8)

(6.4)

3. IMF

2,623

1,029

1,120

1,018

6,041

6,308

6,163

5,964

 

(3.1)

(0.6)

(0.5)

(0.5)

(2.3)

(2.1)

(1.8)

(1.5)

4. Trade Credit

4,301

7,165

10,328

14,481

16,841

18,614

19,067

17,705

 

(5.1)

(4.2)

(4.6)

(6.5)

(6.5)

(6.1)

(5.5)

(4.5)

5. ECBs

10,209

41,443

62,334

62,461

70,726

88,479

104,786

120,893

 

(12.2)

(24.0)

(27.8)

(27.8)

(27.1)

(28.9)

(30.3)

(31.0)

6. NRI Deposits

10,209

41,240

43,672

41,554

47,890

51,682

58,608

70,823

 

(12.2)

(23.9)

(19.5)

(18.5)

(18.4)

(16.9)

(16.9)

(18.2)

7. Rupee Debt

12,847

1,951

2,017

1,523

1,658

1,601

1,354

1,258

 

(15.3)

(1.1)

(0.9)

(0.7)

(0.6)

(0.5)

(0.4)

(0.3)

8. Long-term Debt (1 to 7)

75,257

144,230

178,669

181,185

208,606

240,871

267,319

293,350

 

(89.8)

(83.7)

(79.6)

(80.7)

(79.9)

(78.8)

(77.4)

(75.2)

9. Short-term Debt

8,544

28,130

45,738

43,313

52,329

64,990

78,179

96,697

 

(10.2)

(16.3)

(20.4)

(19.3)

(20.0)

(21.2)

(22.6)

(24.8)

Total (8+9)

83,801

172,360

224,407

224,498

260,935

305,861

345,498

390,048

P: Provisional. PR: Partially Revised.

IMF: International Monetary Fund; ECBs: External Commercial Borrowings; NRI: Non-Resident Indian

Note: Figures in parentheses are percentage to total external debt.

Source: Ministry of Finance, Government of India and Reserve Bank of India.

3. Components of External Debt

Almost all the major components of the external debt recorded a rise during the year except bilateral, IMF, exports credits and rupee debt.

  1. External debt on account of commercial borrowings increased by US$ 16.1 billion during 2012-13 as compared with US$ 16.3 billion in 2011-12. Trade credit components of external debt (both long-term and short-term) showed an increase of US$ 20.3 billion as at end-March 2013 over end-March 2012 (Table 2).

  2. The short-term debt increased by US$ 18.5 billion to US$ 96.7 billion as at end-March 2013 from US$ 78.2 billion as at end-March 2012 mainly on account of rise in short-term trade credit.

  3. NRI deposits increased by US$ 12.2 billion to US$ 70.8 billion as at end-March 2013 over the level as at end-March 2012 primarily on account of increase in rupee denominated NRI deposits reflecting the impact of deregulation of interest rates on these deposits in December 2011.

  4. The loans under external assistance (multilateral and bilateral debt) declined by around US $ 0.6 billion during 2012-13 as compared with an increase of US$ 3.2 billion in the preceding year.

Table 2: External Debt - Outstanding and Variation

(US$ million)

Memo Items

Outstanding at the end-of March

Absolute variation

Percentage variation

2011 (R)

2012 (PR)

2013 (P)

Mar-11 to Mar-12

Mar-12 to Mar-13

Mar-11 to Mar-12

Mar-12 to Mar-13

1

2

3

4

5

6

7

8

1. Multilateral

48,475

50,453

51,642

1,978

1,189

4.1

2.4

2. Bilateral

25,712

26,888

25,065

1,176

-1,823

4.6

-6.8

3. IMF

6,308

6,163

5,964

-145

-199

-2.3

-3.2

4. Export Credit

18,614

19,067

17,705

453

-1,362

2.4

-7.1

5.Commercial Borrowings

88,479

104,786

120,893

16,307

16,107

18.4

15.4

6. NRI Deposits

51,682

58,608

70,823

6,926

12,215

13.4

20.8

7. Rupee Debt

1,601

1,354

1,258

-247

-96

-15.4

-7.1

8. Short term Debt

64,990

78,179

96,697

13,189

18,518

20.3

23.7

Of which:

 

 

 

 

 

 

 

Short term trade credit

58,463

65,130

86,787

6,667

21,657

11.4

33.3

Total Debt

305,861

345,498

390,048

39,637

44,550

13.0

12.9

Memo Items

 

 

 

 

 

 

 

A. Long-Term Debt

240,871

267,319

293,351

26,448

26,031

11.0

9.7

B. Short-Term Debt

64,990

78,179

96,697

13,189

18,518

20.3

23.7

P: Provisional. PR: Partially Revised.

Source: Ministry of Finance, Government of India and Reserve Bank of India.

4. Currency Composition of India’s External Debt

The US dollar denominated debt continued to be the largest components of India’s external debt with a share of 57.2 per cent as at end-March 2013, followed by Indian rupee (24.0 per cent), SDR (7.5 per cent), Japanese Yen (6.3 per cent) and Euro (3.5 per cent).

5. External Debt by Residual Maturity

Based on residual maturity, the short-term debt accounted for 44.2 per cent of total external debt as at end-March 2013. Within the short-term debt, the share of NRI deposits was the highest at 28.4 per cent. The ratio of short-term debt by residual maturity to foreign exchange reserves worked out to 59.0 per cent at end-March 2013 (Table 3).

Table 3: Residual Maturity of External Debt Outstanding as at End-March 2013

(US $ million)

Components

Short-term up to one year

Long-term

Total

1 to 2 years

2 to 3 years

More than 3 years

(2) to (5)

1

2

3

4

5

6

1. Sovereign Debt (long-term) $

5,603

5,810

6,011

60,444

77,868

2. External Commercial Borrowings #

21,038

19,660

23,621

80,341

144,660

3. NRI deposits {(i)+(ii)+(iii)}

49,005

7,257

4,543

10,018

70,823

(i) FCNR(B)

11,816

1,580

1,124

668

15,188

(ii) NR(E)RA

29,575

4,638

3,031

8,680

45,924

(iii) NRO

7,613

1,039

388

670

9,710

4. Short-term Debt* (Original maturity)

96,697

 

 

 

96,697

Total (1 to 4)

172,346

32,727

34,175

150,803

390,048

Memo Items

 

 

 

 

 

Short-term debt (Residual maturity as per cent of total external debt )

44.2

 

 

 

 

Short-term debt (Residual maturity as per cent of Reserves)

59.0

 

 

 

 

$: Inclusive of FII Investments in Government Securities.
*: Also includes FII investments in sovereign debt and commercial paper.
#: External Commercial Borrowings are inclusive of trade credit, FII investments in corporate debt instruments and a portion of non-Government multilateral and bilateral borrowing and therefore may not tally with the ECBs provided in other Tables under original maturity
Note: Residual Maturity of NRI Deposits is estimated on the basis of the Survey conducted by the Reserve Bank of India on NRI deposits outstanding as on March 31, 2012.
Source: Ministry of Finance, Government of India and Reserve Bank of India.

6. Government and Non-Government External Debt

Government (Sovereign) external debt stood at US$ 81.7 billion as at end-March 2013 as against US$ 81.9 billion as at end-March 2012. The shares of Government and non-Government external debt in the total external debt were 20.9 per cent and 79.1 per cent, respectively, as at end-March 2013 (Table 4).

Table 4: Government and Non-Government External Debt

(US $ million)

Sr. No. Components

End-March

2007

2008

2009

2010

2011 R

2012 PR

2013 PR

1

2

3

4

5

6

7

8

A. Sovereign Debt (I+II)

49,360

58,070

55,870

67,067

78,072

81,895

81,654

(As a percentage of GDP)

5.0

4.7

5.1

4.7

4.5

4.7

4.4

I. External Debt on Government Account under External Assistance

46,155

52,538

51,816

55,235

62,295

63,374

61,336

II. Other Government External Debt @

3,205

5,529

4,054

11,832

15,777

18,521

20,319

B. Non-Government Debt #

1,23,000

1,66,337

1,68,628

193,868

227,789

263,603

308,394

(As a percentage of GDP)

12.5

13.3

15.2

13.6

13.0

15.0

16.7

C. Total External Debt (A+B)

1,72,360

2,24,407

2,24,498

260,935

305,861

345,498

390,048

(As a percentage of GDP)

17.5

18.0

20.3

18.3

17.5

19.7

21.2

@: Other Government external debt includes Defence Debt, Investment in Treasury Bills/ Government Securities by FIIs, Foreign Central Banks and International Institutions and IMF.
#: Includes external debt of Monetary Authority.
Source: Ministry of Finance, Government of India and Reserve Bank of India

7. Select Indicators of External Debt

Among the indicators of external debt considered for assessing vulnerability, almost all the indicators showed deterioration as at end-March 2013 as compared to end-March 2012. Debt service ratio, however, showed marginal improvement at end-March 2013 over the end-March 2012 (Table 5).

The data on external debt outstanding as at end-March 2013, along with revised data for the earlier quarters are set out in Statements 1 and 2.

Table 5: India’s Key External Debt Indicators

End-March

External Debt

Ratio of External Debt to GDP

Debt Service Ratio

Ratio of Foreign Exchange Reserves to Total Debt

Ratio of Concessional Debt to Total Debt

Ratio of Short-Term Debt to Foreign Exchange Reserves

Ratio of Short- Term Debt to Total Debt

(US $ billion)

(per cent)

(per cent)

(per cent)

(per cent)

(per cent)

(per cent)

1

2

3

4

5

6

7

8

1991

83.8

28.7

35.3

7.0

45.9

146.5

10.2

1996

93.7

27.0

26.2

23.1

44.7

23.2

5.4

2001

101.3

22.5

16.6

41.7

35.4

8.6

3.6

2002

98.8

21.1

13.7

54.7

35.9

5.1

2.8

2003

104.9

20.3

16.0*

72.5

36.8

6.1

4.5

2004

112.6

18.0

16.1**

100.3

35.8

3.9

3.9

2005

134.0

18.1

5.9^

105.6

30.7

12.5

13.2

2006

139.1

16.8

10.1#

109.0

28.4

12.9

14.0

2007

172.4

17.5

4.7

115.6

23.0

14.1

16.3

2008

224.4

18.0

4.8

138.0

19.7

14.8

20.4

2009

224.5

20.3

4.4

112.2

18.7

17.2

19.3

2010

260.9

18.2

5.8

106.9

16.8

18.8

20.1

2011R

305.9

17.5

4.4

99.7

15.5

21.3

21.2

2012PR

345.5

19.7

6.0

85.2

13.9

26.6

22.6

2013P

390.0

21.2

5.9 

74.9

11.7

33.1

24.8

P: Provisional. PR: Partially Revised.

*  Works out to 12.4 per cent, with the exclusion of pre payment of external debt of US $ 3,430 million.

** Works out to 8.2 per cent with the exclusion of pre payment of external debt of US $ 3,797 million and redemption of Resurgent India Bonds (RIBs) of US $ 5,549 million.

^ works out to 5.7 per cent with the exclusion of pre payment of external debt of US $ 381 million.

# works out to 6.3 per cent with the exclusion of India Millennium Deposits (IMDs) repayments of US $ 7.1 billion and pre payment of external debt of US $ 23.5 million.

Source: Ministry of Finance, Government of India and Reserve Bank of India.

Alpana Killawala
Chief General Manager

Press Release : 2012-13/2186

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