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Date : Jun 30, 2009
India’s External Debt as at the end of March 2009

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. A detailed account of external debt as compiled in the standard format as at end-March 2009 in rupee and US dollar terms and revised data for the earlier quarters are set out in Statement 1 and 2, respectively. The developments relating to India’s external debt as at end-March 2009 are discussed in the following paragraphs.

Major Highlights of External Debt

(i) India’s external debt, as at end-March 2009, was placed at US $ 229.9 billion (22.0 per cent of GDP) recording an increase of US $ 5.3 billion or 2.4 per cent over the level of the previous year mainly due to the increase in trade credits.

(ii) As per an international comparison of external debt of the twenty most indebted countries, India was the fifth most indebted country in 2007.

(iii) By way of composition of external debt, the share of commercial borrowings was the highest at 27.3 per cent as at end-March 2009 followed by short-term debt (21.5 per cent), NRI deposits (18.1 per cent) and multilateral debt (17.2 per cent).

(iv) The debt service ratio has declined steadily over the years, and stood at 4.6 per cent as at end-March 2009.

(v) Excluding the valuation effects due to appreciation of US dollar against other major currencies and Indian rupee, the stock of external debt would have increased by US$ 18.7 billion as compared with the stock as at end-March 2008.

(vi) The share of short-term debt in total debt increased to 21.5 per cent at end-March 2009 from 20.9 per cent at end-March 2008, primarily on account of rise in short-term trade credits.

(vii) Based on residual maturity, the short-term debt accounted for 40.6 per cent of the total external debt at end-March 2009

(viii) The ratio of short-term debt to foreign exchange reserves at 19.6 per cent in March 2009 was higher compared to 15.2 per cent in March 2008.

(ix) The US dollar continues to remain the dominant currency accounting for 57.1 per cent of the total external debt stock as at end-march 2009.

(x)India’s foreign exchange reserves provided a cover of 109.6 per cent to the external debt stock at the end of March 2009 as compared with 137.9 per cent as at end-March 2008.

1. Stock of India’s External Debt as at end-March 2009

(i) India’s external debt, as at end-March 2009, was placed at US $ 229.9 billion (22.0 per cent of GDP) recording an increase of US $ 5.3 billion or 2.4 per cent over the end-March 2008 level mainly due to the increase in trade credits. (Table 1 and Chart 1).

Table 1: External Debt Outstanding

(US $ billion)

At end of Total Variation
External Debt Over corresponding Quarter of Previous year Over Previous Quarter
  Amount Per cent Amount Per cent
1 2 3 4 5 6
March 2007 171.3 33.2 24.0 10.9 6.8
June 2007 182.3 37.3 25.7 11.0 6.4
September 2007 195.6 45.0 29.9 13.3 7.3
December 2007 206.0 45.6 28.4 10.4 5.3
March 2008 224.6 53.3 31.1 18.6 9.0
June 2008 223.6 41.3 22.6 -1.0 -0.5
September 2008 223.5 27.9 14.3 0.0 0.0
December 2008 229.3 23.3 11.3 5.7 2.6
March 2009 P 229.9 5.3 2.4 0.6 0.3
P: Provisional
Source: Ministry of Finance, Government of India and Reserve Bank of India.

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2. Valuation Changes

(i) The valuation effect reflecting the appreciation of the US dollar against other major international currencies and Indian rupee resulted in a decline in India’s external debt by US $ 13.4 billion. This implies that excluding the valuation effects, the stock of external debt as at end-March 2009 would have increased by US $ 18.7 billion over the level at end-March 2008.

3. Components of External Debt

(i) By way of composition of external debt, the share of commercial borrowings was the highest at 27.3 per cent as at end-March 2009 followed by short-term debt (21.5 per cent), NRI deposits (18.1 per cent) and multilateral debt (17.2 per cent) (Table 2).
(ii) The long-term debt at US$ 180.5 billion and short-term debt at US$ 49.4 billion accounted for 78.5 per cent and 21.5 per cent, respectively, of the total external debt as at end-March 2009.

Table 2: External Debt by Component
(US $ million)
Item End- March
  1991 1998 2004 2005 2006 2007 2008 2009 P
1 2 3 4 5 6 7 8 9
1. Multilateral 20,900 29,553 29,297 31,744 32,620 35,337 39,490 39,566
  (24.9) (31.6) (26.2) (23.9) (23.6) (20.6) (17.6) (17.2)
2. Bilateral 14,168 16,969 17,277 17,034 15,761 16,065 19,701 20,587
  (16.9) (18.1) (15.5) (12.8) (11.4) (9.4) (8.8) (9.0)
3. IMF 2,623 664 0 0 0 0 0 0
  (3.1) (0.7) (0.0) (0.0) (0.0) (0.0) (0.0) (0.0)
4. Trade Credit 4,301 6,526 4,697 5,022 5,420 7,165 10,358 14,604
  (5.1) (7.0) (4.2) (3.8) (3.9) (4.2) (4.6) (6.4)
5. ECBs 10,209 16,986 22,007 26,405 26,452 41,443 62,337 62,676
  (12.2) (18.2) (19.7) (19.9) (19.1) (24.2) (27.8) (27.3)
6. NRI Deposits 10,209 11,913 31,216 32,743 36,282 41,240 43,672 41,554
  (12.2) (12.7) (28.0) (24.6) (26.3) (24.1) (19.4) (18.1)
7. Rupee Debt 12,847 5,874 2,720 2,302 2,059 1,951 2,016 1,527
  (15.3) (6.3) (2.4) (1.7) (1.5) (1.1) (0.9) (0.7)
8. Long-term Debt (1to 7) 75,257 88,485 1,07,214 1,15,250 1,18,594 1,43,201 1,77,574 1,80,514
  (89.8) (94.6) (96.0) (86.7) (85.9) (83.6) (79.1) (78.5)
9. Short-term Debt 8,544 5,046 4,431 17,723 19,539 28,130 46,999 49,373
  (10.2) (5.4) (4.0) (13.3) (14.1) (16.4) (20.9) (21.5)
Total (8+9) 83,801 93,531 1,11,645 1,32,973 1,38,133 1,71,331 2,24,573 2,29,887
  (100.0) (100.0) (100.0) (100.0) (100.0) (100.0) (100.0) (100.0)
P: Provisional
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.

(iii) The rise in external debt stock was mainly due to the increase in trade credits which rose by US$ 4.2 billion over its level at end-March 2008.

(iv) The short-term debt increased by US$ 2.4 billion as at end-March 2009 mainly on account of rise in short-term trade credits (Table 3 and Chart 2).

(v) Outstanding NRI deposits at US $ 41.6 billion as at end-March 2009 declined by US $ 2.1 billion over the level at end-March 2008 mainly due to valuation effects as there was positive inflows under NRI deposits during 2008-09.

Table 3: Variation in External Debt by Components
Item External debt outstanding
at the end-of
(US $ million)
Absolute variation
(US $ million)
Percentage variation
(per cent)
Mar 07 Mar 08 Mar 09P Mar 07
to
Mar 08
Mar 08
to
Mar 09
Mar 07 to
Mar 08
Mar 08
to
Mar 09
1 2 3 4 5 6 7 8
1. Multilateral 35,337 39,490 39,566 4,153 76 11.8 0.2
2. Bilateral 16,065 19,701 20,587 3,636 886 22.6 4.5
3. IMF 0 0 0 0 0 0.0 0.0
4. Trade  Credit 7,165 10,358 14,604 3,193 4,246 44.6 41.0
5.Commercial Borrowings 41,443 62,337 62,676 20,894 339 50.4 0.5
6. NRI Deposits 41,240 43,672 41,554 2,432 -2,118 5.9 -4.8
7. Rupee Debt 1,951 2,016 1,527 65 -489 3.3 -24.3
8. Short-Term Debt
Of which:
(i) Short-Term Trade Credit
28,130 46,999 49,373 18,869 2,374 67.1 5.1
25,979 43,162 45,975 17,183 2,813 66.1 6.5
Total Debt (1 to 8) 171,331 224,573 229,887 53,242 5,314 31.1 2.4
Memo Items      
A. Long-Term Debt (1 to 7) 143,201 177,574 180,514 34,373 2,940 24.0 1.7
B. Short-Term  Debt 28,130 46,999 49,373 18,869 2,374 67.1 5.1
P: Provisional
Source: Ministry of Finance, Government of India and Reserve Bank of India.

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(vi) The level of approvals of ECBs during 2008-09 (April-March) was significantly lower at US$ 18.4 billion as compared to US$ 31.0 billion during 2007-08. As a result, gross disbursements for 2008-09 were lower at US $ 13.4 billion than that of US$ 28.8 billion during the previous year (Table 4).

Table 4: External Commercial Borrowings
(US $ million)
Year Approvals# Gross Disbursement* Amortisation* Interest* Total Servicing ECB Debt Outstanding
1 2 3 4 5 6 (4+5) 7
1990-91 1,903 4,252 2,004 1,410 3,414 10,209
1995-96 6,286 4,252 3,868 1,380 5,248 13,873
2000-01 2,837 9,621 5,378 1,695 7,073 24,408
2001-02 2,653 2,684 4,107 1,456 5,563 23,320
2002-03 4,235 3,505 5,019 1,167 6,186 22,472
2003-04 6,671 5,225 8,045 2,119 10,164 22,007
2004-05 11,490 9,084 3,571 959 4,530 26,405
2005-06 17,175 14,343 11,584 3,015 14,599 26,452
2006-07 24,492 20,257 3,814 2,583 6,397 41,443
2007-08 PR 30,954 28,784 6,119 3,652 9,771 62,337
2008-09 QE 18,364 13,377 6,439 3,962 10,401 62,676
PR : Partially Revised ; QE: Quick Estimates.
*: Revised; based on Balance of Payments data.
# : Based on date of agreement of the loan which may differ from the date of granting the loan registration number by the RBI.  Ceiling on ECB approvals is fixed on the basis of the latter, which may either be after or before the date of agreement of the loan.  Hence, there may be some difference between the amount shown under approvals in the table and the amount of ceiling fixed for a particular year.
Note: Disbursements during 1998-99 and 2000-01 include RIBs (US$ 4.2 billion) and IMDs (US $ 5.5 billion), respectively.  Debt service payments during 2003-04 and 2005-06 include redemption of RIBs and IMDs, respectively.

4. Currency Composition

(i) The currency composition of India’s external debt is generally disseminated in terms of major foreign currencies such as US dollar, Japanese Yen, Euro, Pound Sterling, Special Drawing Rights (SDR) and the domestic currency i.e., Indian Rupee.

(ii) The US dollar continues to be the dominant currency accounting for 57.1 per cent of the total external debt stock as at end-March 2009, followed by the Japanese yen (14.2  per cent), Indian rupee (13.2 per cent) and SDR (9.2 per cent) (Table 5 and Chart 3). The share of Euro has been at around 4 per cent in the recent years.

Table 5: Currency Composition of External Debt
(Percentage share in total external debt)
  As at end March
Currency 2004 2005 2006 2007 2008 2009 P
1 2 3 4 5 6 7
US Dollar 40.5 48.0 49.2 51.4 54.4 57.1
SDR 15.5 14.2 13.7 11.9 10.0 9.2
Indian Rupee 22.7 19.6 18.9 18.6 17.5 13.2
Japanese Yen 11.6 10.5 10.9 11.5 12.0 14.2
Euro 5.8 4.6 4.4 3.9 3.6 4.1
Pound Sterling 3.4 2.6 2.6 2.4 2.2 1.9
Others 0.5 0.5 0.3 0.3 0.3 0.3
Total 100.0 100.0 100.0 100.0 100.0 100.0
P: Provisional
Source: Ministry of Finance, Government of India and Reserve Bank of India.

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5. Instrument-wise Classification of External Debt

(i) The instrument-wise classification of India’s external debt as at end-March 2009 reveals that ‘loans’ accounted for 51.8 per cent of total debt outstanding as compared to 49.5 per cent as at end-March 2008 (Table 6).

(ii)The group ‘currency and deposits’ and ‘trade credits’ together accounted for 50.6 per cent of the total non-Government debt as at end-March 2009 as against 52.6 per cent as at end-March 2008.

Table 6: Instrument-wise Classification of External Debt Outstanding

(US$ million)

Sr. No. Borrower End-March 2008 End-March 2009
1 2 3 4
A. Government (1+2) 56,947 54,856
1. Short-Term 615 939
  (i) Money Market Instruments 615 939
2. Long-term {(i)+(ii)+(iii)} 56,332 53,917
  (i)  Bonds and Notes 2,300 963
  (ii)  Loans 52,740 51,680
  (iii) Trade Credits 1,292 1,274
B. Monetary Authority 1,115 764
 1. Short-term 1,115 764
  (i) Currency and Deposits 1,115 764
C. Non-Government (1+2) 1,66,511 1,74,267
1. Short-Term {(i)+(ii)} 45,269 47,670
  (i)  Money Market Instruments 2,107 1,695
  (ii)  Trade Credits 43,162 45,975
2. Long-term {(i)+(ii)+(iii)+(iv)} 1,21,242 1,26,597
  (i)  Bonds and Notes 18,302 17,018
  (ii)  Loans 58,484 67,310
  (iii)  Currency and Deposits 43,672 41,554
  (iv) Trade Credits 784 715
  Total External Debt (A+B+C) 2,24,573 2,29,887
Source: Ministry of Finance, Government of India and Reserve Bank of India.

6. Short-term Debt

(i) The short-term debt has become an important component for measuring the liquidity and refinancing risks. In the recent years, efforts have been taken to expand the coverage of short-term external debt. The data on short-term debt now includes suppliers’ credit up to and above 180 days, FII investments in Government debt, investment by foreign central banks and international institutions in Treasury Bills and external liabilities of central banks and commercial banks.

(ii) Short-term debt by original maturity has increased over the period mainly because of the increase in trade related credits due to growing imports. The share of trade related credits in total short-term debt increased from 91.8 per cent as at end-March 2008 to 93.1 per cent as at end-March 2009 (Table 7).

Table 7: Short-Term Debt by Original Maturity

(US $ million)

Components  End-March
1991 2001 2005 2006 2007 2008 2009
1 2 3 4 5 6 7 8
A Short-Term Debt 8,544 3,628 17,723 19,539 28,130 46,999 49,373
  a) NRI Deposits  (up to 1 year maturity) @ 3,577 957 0 0 0 0 0
  b) FC (B&O) Deposits  (up  to 1 year maturity) 167 0 0 0 0 0 0
  c) Trade Related Credits # 4,800 2,671 16,271 19,399 25,979 43,162 45,975
  (i)  Above 6 months and upto 1year 2,267 2,671 7,529 8,696 11,971 22,884 23,346
  (ii) Upto 6 months 2,533 0 8,742 10,703 14,008 20,278 22,629
  d)  FII Investments in Government Treasury  Bills & other instruments 0 0 1,452 140 397 651 2,065
  e)  Investment in Treasury Bills by foreign central banks and international institutions etc. - - - - 164 155 105
  f)  External Debt Liabilities of: - - - - 1,590 3,031 1,228
  (i) Central Bank - - - - 501 1,115 764
  (ii) Commercial Bank - - - - 1,089 1,916 464
B Imports (during the year)* 27,915 57,912 1,18,908 1,57,056 1,90,670 2,57,789 2,94,587
C Trade Credits to Imports (%) 17.2 4.6 13.7 12.4 13.6 16.7 15.6
@: Short-term deposits of less than one-year maturity under FCNR(A) were withdrawn with effect from May 15, 1993, such deposits under FCNR(B) and NR(E)RA were withdrawn effective October 1999 and April 2003, respectively.
#: Data on short-term Trade Credits of less than six months in respect of suppliers’ credit and FII investment in debt papers are included since end-March 2005.
*: On balance of payments basis.
Source: Ministry of Finance, Government of India and Reserve Bank of India

7. External Debt by Residual Maturity

(i) While external debt is generally compiled in terms of original maturity, analysing the external debt, in particular short term debt in terms of residual maturity is important from the point of view of foreign exchange liquidity management and to ascertain the total foreign exchange outgo on account of debt service payments in the immediate future.

(ii) The ‘short-term debt by residual maturity’ comprises the repayments due under medium and long-term debt by original maturity during one year reference period along with the short-term debt with original maturity. The balance constitutes the long-term debt by residual maturity. Based on residual maturity, the short-term debt accounted for 40.6 per cent of total external debt as at end-March 2009. The ratio of short-term debt by residual maturity to foreign exchange reserves worked out to 37.0 per cent at end-March 2009 (Table 8).

Table 8: Residual Maturity of External Debt Outstanding as at End-March 2009

(US $ million)

  Short-term Long-term Total
(2) to (5)
Components Up to one year 1 to 2 years 2 to 3 years More than 3 years
1 2 3 4 5 6
1. Sovereign Debt (long-term) 2,603 2,924 3,015 45,376 53,917
2. External Commercial Borrowings (including trade credit) 9,189 10,839 14,521 50,494 85,043
3. NRI deposits {(i)+(ii)+(iii)} 32,108 4,465 3,757 1,224 41,554
(i) FCNR(B) 9,944 2,085 1,075 107 13,211
(ii) NR(E)RA 18,649 2,015 2,041 865 23,570
(iii) NRO 3,516 365 641 252 4,773
4. Short-term Debt* (Original maturity) 49,373 - - - 49,373
Total (1 to 4) 93,273 18,228 21,293 97,093 229,887
Memo Items          
Short-term debt (Residual maturity as per cent of total debt 40.6        
Short-term debt (Residual maturity as per cent of Reserves) 37.0        
* Also includes short-term component of sovereign debt amounting to US$ 939 million.
Note: Residual Maturity of NRI Deposits is estimated on the basis of the Survey conducted by the Reserve Bank on NRI deposits outstanding as on March 31, 2009.
Source:  Ministry of Finance, Government of India and Reserve Bank of India.

8. Government and Non-Government External Debt

(i) Government (Sovereign) external debt stood at US$ 54.9 billion as at end-March 2009 while non-Government debt amounted to US $ 175.0 billion.

(ii) The share of non-Government debt in total external debt has increased steadily since March 2003. This trend continued during 2008-09 as the share of non-Government debt in total external debt increased further to 76.1 per cent as at end-March 2009 as against 74.6 per cent as at end-March 2008 (Table 9 and Chart 4).

Table 9: Government and Non-Government External Debt
(US $ million)
Sr. No. Components End-March
2003 2004 2005 2006 2007 2008 2009
1 2 3 4 5 6 7 8 9
A. Sovereign Debt (I+II) 43,612 44,674 46,668 45,346 48,330 56,947  54,856
  (As a percentage of GDP) 8.4 7.2 6.5 5.6 5.1 4.8  5.3
I. External Debt on Government Account under External Assistance 41,216 41,142 43,686 43,510 46,155 52,538  51,816
II. Other Government External Debt @ 2,396 3,532 2,982 1,768 2,175 4,409  3,040
B. Non-Government Debt # 61,302 66,971 86,305 92,787 1,23,001 1,67,626  1,75,031
  (As a percentage of GDP) 11.9 10.6 12.0 11.5 13.0 14.2 16.8
C. Total External Debt (A+B) 1,04,914 1,11,645 1,32,973 1,38,133 1,71,331 2,24,573  2,29,887
  (As a percentage of GDP) 20.3 17.8 18.5 17.2 18.1 19.0 22.0
@: Other Government external debt includes defence debt, investment in Treasury Bills/ Government securities by FIIs, foreign central banks and international institutions.
#: Includes external debt of Monetary Authority.
Source: Ministry of Finance, Government of India and Reserve Bank of India

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9. Debt Service Payments

(i) India’s debt service payments amounted to US $ 15.4 billion during 2008-09 (April-March) as compared to US $14.9 billion during 2007-08 (April-March) (Table 10).

(ii) India’s debt service ratio1 has improved progressively over the years owing to the combined effect of moderation in debt service payments and growth in external current receipts. The debt service ratio had declined from a peak of 35.3 per cent in 1990-91 to 5.9 per cent in 2004-05 but increased to 10.1 per cent during 2005-06 due to repayments relating to the India Millennium Deposits. The debt service ratio declined to 4.6 per cent during 2008-09.

(iii) Servicing of External Commercial Borrowings (including principal and interest payments) accounted for 67.4 per cent of the total debt service during 2008-09.

Table 10: India’s External Debt Service Payments
(US $ million)
Sr. No. Item 1990-91 2000-01 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09
1 2 3 4 5 6 7 8 9 10
1 External Assistance 2,315 3,444 6,983 2,855 2,652 2,942 3,241 3,381
  Repayment 1,187 2,338 6,193 2,129 1,945 1,960 2,099 2,372
  Interest 1,128 1,106 790 726 707 982 1,142 1,009
2 External Commercial Borrowings 3,414 7,073 10,164 4,530 14,839 6,331 9,771 10,401
  Repayment 2,004 5,378 8,045 3,571 11,824 3,814 6,119 6,439
  Interest 1,410 1,695 2,119 959 3,015 2,517 3,652 3,962
3 I.M.F. 778 26 0 0 0 0 0 0
  Repayment 644 26 0 0 0 0 0 0
  Interest 134 0 0 0 0 0 0 0
4 NRI Deposits Interest 1,282 1,661 1,642 1,353 1,497 1,969 1,813 1,547
5 Rupee Debt Service Repayments 1,193 617 376 417 572 162 121 101
6 Total Debt Service (1 to 5) 8,982 12,821 19,165 9,155 19,560 11,404 14,946 15,430
  Repayment 5,028 8,359 14,614 6,117 14,341 5,936 8,339 8,912
  Interest 3,954 4,462 4,551 3,038 5,219 5,468 6,607 6,518
7 Current Receipts # 25,479 77,467 1,19,239 1,54,123 1,94,170 2,42,811 3,14,014 3,37,095
  Debt Service Ratio (6/7) (%) 35.3 16.6 16.1 5.9 10.1 4.7 4.8 4.6
#: Current Receipts minus Official Transfers.
Source: Ministry of Finance, Government of India and Reserve Bank of India

(vi) At end-March 2009, the projected debt service payments for External Commercial Borrowings (ECBs) and Foreign Currency Convertible Bonds (FCCBs) revealed that the principal repayments between 2011-12 and 2012-13 would be higher (Table 11). Despite consolidation of high cost loans and lower interest rates on the current borrowings, interest payments would also increase during these years due to higher disbursement. The projections do not include future debt service obligations arising out of fresh borrowings.

Table 11: Projected Debt Service Payments for ECBs and FCCBs
(US $ million)
Year Principal Interest Total
1 2 3 4
2009-10 8,633 2,057 10,690
2010-11 10,239 1,996 12,235
2011-12 13,877 2,367 16,244
2012-13 15,823 2,141 17,964
2013-14 10,256 961 11,217
2014-15 5,608 627 6,235
2015-16 3,786 465 4,251
2016-17 3,602 331 3,933
2017-18 2,285 212 2,497
2018-19 1,655 135 1,790
Note: Projections on debt servicing are based on the end-March 2009 debt outstanding position.
The projections exclude NRI deposits and FII investment in government debt securities.

10. Sustainability of India’s External Debt

(i) An assessment of sustainability of external debt is generally undertaken based on the trends in certain key ratios such as debt to GDP ratio, debt service ratio, short-term debt to total debt and total debt to foreign exchange reserves. India has managed its external debt successfully as reflected in the perceptible improvement in various external debt sustainability indicators (Table 12).

(ii) The ratio of external debt to GDP increased to 22.0 per cent as at end-March 2009 from 19.0 per cent as at end-March 2008.

(iii) The debt service ratio has declined steadily over the years, and stood at 4.6 percent as at end-March 2009.

(iv) India’s foreign exchange reserves provided a cover of 109.6 per cent to the external debt stock at the end of March 2009 as compared to 137.9 per cent as at end-March 2008 (Chart 5).

(v) The share of concessional debt in total external debt declined to 18.2 per cent as at end-March 2009 from 19.7 per cent at end-March 2008 reflecting the continuing increase in non-concessional private debt in India's external debt stock.

(vi) The ratio of short-term debt to foreign exchange reserves at 19.6 per cent as at end-March 2009 was higher than that of 15.2 per cent in the previous year.

(vii) The share of short-term debt in total debt increased to 21.5 per cent at end-March 2009 from 20.9 per cent at end-March 2008.

Table 12: India’s Key External Debt Indicators
Year External Debt
(US $ billion)
Ratio of External Debt to GDP
(per cent)
Debt Service Ratio
(per cent)
Ratio of Foreign Exchange Reserves to Total Debt
(per cent)
Ratio of Concessional Debt to Total Debt
(per cent)
Ratio of Short-Term Debt to Foreign Exchange Reserves
(per cent)
Ratio of Short- Term Debt to Total Debt
(per cent)
1 2 3 4 5 6 7 8
1990-91 83.8 28.7 35.3 7.0 45.9 146.5 10.2
1995-96 93.7 27.0 26.2 23.1 44.7 23.2 5.4
2000-01 101.3 22.5 16.6 41.7 35.4 8.6 3.6
2001-02 98.8 21.1 13.7 54.7 35.9 5.1 2.8
2002-03 104.9 20.3 16.0* 72.5 36.8 6.1 4.5
2003-04 111.6 17.8 16.1** 101.2 36.1 3.9 4.0
2004-05 133.0 18.5 5.9^ 106.4 30.9 12.5 13.3
2005-06 138.1 17.2 10.1# 109.8 28.6 12.9 14.1
2006-07 171.3 18.1 4.7 116.2 23.1 14.1 16.4
2007-08 224.6 19.0 4.8 137.9 19.7 15.2 20.9
2008-09P 229.9 22.0 4.6 109.6 18.2 19.6 21.5
P: Provisional
* Works out to 12.4 per cent, with the exclusion of prepayment 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

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11. Cross Country Comparison

(i) According to the latest data available on Global Development Finance Online Database, World Bank, the international comparison of external debt of the twenty most indebted countries indicates that India was the fifth most indebted country in 2007 as compared with third position in 1990 (Table 13).

(ii) The element of concessionality in India’s external debt portfolio was the third highest after Indonesia and Philippines.

(iii) India’s debt service ratio was third lowest with China and Malaysia having first and second lowest debt service ratio, respectively.

(iv) In terms of ratio of external debt to Gross National Income (GNI), India’s position was sixth lowest, with China having the lowest ratio of external debt to GNP.

(v) India’s position with respect to short-term debt to total external debt was eighth lowest with Mexico having the lowest ratio of short-term debt to total external debt.

(vi) In terms of reserves to total debt, India’s position was fourth as China, Malaysia and Thailand had higher reserves to debt ratio than India.

Table 13: International Comparison of Top Twenty Debtor Countries, 2007
  External debt stocks, total
(US $ billion)
Concessional debt/Total debt
(EDT)
(per cent)
Debt service ratio
(per cent)
External Debt to GNI
(per cent)
Short-term debt/Total debt (EDT) (per cent) Forex Reserves to
Total Debt
(per cent)
1 2 3 4 5 6 7
China 373.6 10.1 2.2 11.6 54.5 413.9
Russian Federation 370.2 0.4 9.1 29.4 21.4 129.1
Turkey 251.5 2.1 32.1 38.8 16.6 30.4
Brazil 237.5 1.0 27.8 18.7 16.5 75.9
India 224.6 19.7 4.8 19.0 20.9 137.9
Poland 195.4 0.4 25.6 47.7 30.9 33.6
Mexico 178.1 0.6 12.5 17.7 5.1 49.0
Indonesia 140.8 26.2 10.5 33.9 24.8 40.4
Argentina 127.8 1.3 13.0 49.7 29.8 36.1
Kazakhstan 96.1 1.0 49.6 103.7 12.2 18.4
Romania 85.4 1.6 19.1 51.5 35.7 46.8
Ukraine 73.6 2.2 16.9 52.9 31.1 44.1
Philippines 65.8 20.0 13.7 41.9 10.8 51.2
Thailand 63.1 9.6 8.1 26.5 34.3 138.7
Chile 58.6 0.4 14.2 40.3 22.7 28.7
Malaysia 53.7 6.1 4.6 29.4 28.4 189.9
Croatia 48.6 2.1 33.0 97.7 10.5 28.1
Colombia 45.0 2.1 22.0 22.5 11.9 46.6
South Africa 43.4 0.0 5.9 15.8 38.2 75.9
Venezuela, RB 43.1 0.5 7.4 18.7 27.1 78.2
Source: Data for India as published by national authorities for 2007-08 and those for other countries as at
end-December 2007 as available in World Bank’s Global Development Finance Online Database.

(vii) The Quarterly External Debt (QEDS) database, jointly developed by the World Bank and the International Monetary Fund, brings out detailed external debt data of countries that are subscribing to IMF’s Special Data Dissemination Standard/ General Data Dissemination System. The position in respect of the reporting countries for the third and fourth quarters of the calendar year 2008, which has been published by the World Bank (http://go.worldbank.org/6V603CE490) is given at Annex I.

Annex I: Gross External Debt Position of QEDS Reporting
Countries for End-September and End-December 2008
(US$ million)
Sr. No. Countries 2008 Q3 2008 Q4
Short-term Long-term Total Short-term Long-term Total
1 2 3 4 5 6 7 8
1 Argentina 53,660 75,277 1,28,937 56,253 71,859 1,28,112
2 Armenia 429 2,748 3,177 465 2,962 3,427
3 Australia 2,73,741 5,65,950 8,39,691 2,28,190 5,35,482 7,63,671
4 Austria 3,03,048 5,61,405 8,64,453 2,65,533 5,61,961 8,27,494
5 Belarus 8,755 5,802 14,557 7,253 7,565 14,818
6 Belgium 12,02,725 4,20,123 16,22,848 9,64,129 3,82,388 13,46,517
7 Bolivia 317 5,484 5,801 267 5,656 5,923
8 Brazil 47,507 2,25,459 2,72,966 36,466 2,26,466 2,62,931
9 Bulgaria 18,913 32,909 51,822 18,493 32,624 51,117
10 Canada 2,99,552 5,10,854 8,10,406 3,01,712 4,49,599 7,51,311
11 Chile 18,616 50,426 69,042 14,251 50,517 64,768
12 Colombia 5,616 39,793 45,409 5,684 40,708 46,392
13 Costa Rica 3,509 5,297 8,805 3,864 5,218 9,082
14 Croatia 4,123 47,721 51,843 6,620 47,830 54,450
15 Czech Republic 28,553 61,187 89,740 25,941 54,487 80,428
16 Denmark 2,88,064 3,00,587 5,88,651 2,99,226 2,84,127 5,83,353
17 Ecuador 0 0 0 0 0 0
18 Egypt 2,651 29,831 32,481 2,842 29,281 32,123
19 El Salvador 1,497 8,873 10,369 1,542 9,149 10,691
20 Estonia 9,982 17,077 27,059 10,623 16,778 27,401
21 Finland 1,17,488 2,26,735 3,44,223 1,09,624 2,18,935 3,28,559
22 France 22,47,510 28,90,585 51,38,095 21,38,532 28,63,164 50,01,696
23 Georgia 1,062 6,081 7,143 972 6,330 7,302
24 Germany 19,78,058 34,50,105 54,28,163 17,23,723 35,26,777 52,50,499
25 Greece 1,29,621 3,70,543 5,00,164 1,56,216 3,48,397 5,04,612
26 Hong Kong, China 5,10,248 1,67,531 6,77,779 4,83,877 1,76,053 6,59,931
27 Hungary 26,422 1,83,990 2,10,412 26,111 1,83,523 2,09,634
28 India 50,675 1,72,856 2,23,531 46,625 1,82,646 2,29,271
29 Indonesia 20,264 1,31,475 1,51,739 20,488 1,34,578 1,55,067
30 Ireland 10,81,982 13,08,683 23,90,665 11,10,636 12,01,087 23,11,724
31 Israel 35,512 53,423 88,935 32,956 52,312 85,268
32 Italy 9,44,407 16,07,011 25,51,418 8,09,594 15,49,516 23,59,110
33 Japan 12,51,745 8,02,838 20,54,583 14,66,347 8,78,336 23,44,683
34 Kazakhstan 10,946 95,117 1,06,064 10,174 97,639 1,07,813
35 Korea 1,89,598 2,35,918 4,25,516 1,51,056 2,29,439 3,80,495
36 Kyrgyz Republic 292 3,060 3,352 385 3,082 3,467
37 Latvia 15,014 27,452 42,466 14,091 27,963 42,054
38 Lithuania 9,066 24,426 33,492 8,169 24,299 32,469
39 Malaysia 38,796 43,355 82,151 30,892 44,399 75,292
40 Mexico 28,679 1,83,493 2,12,172 24,218 1,76,175 2,00,393
41 Moldova 1,299 2,596 3,895 1,429 2,696 4,125
42 Netherlands 12,57,438 14,31,377 26,88,815 10,68,222 13,71,643 24,39,864
43 Norway 3,02,466 2,56,742 5,59,208 2,74,891 2,76,705 5,51,596
44 Paraguay 710 2,653 3,363 735 2,772 3,507
45 Peru 8,934 26,931 35,865 6,148 28,440 34,587
46 Poland 62,275 2,03,832 2,66,107 50,809 1,91,248 2,42,057
47 Portugal 1,95,715 3,08,391 5,04,106 1,80,351 3,04,359 4,84,710
48 Russian Federation 1,15,759 4,26,322 5,42,082 79,779 4,04,948 4,84,726
49 Slovak Republic 20,255 32,791 53,045 20,102 32,424 52,527
50 Slovenia 17,842 39,257 57,100 16,170 38,240 54,409
51 South Africa 27,978 49,547 77,525 25,462 46,349 71,811
52 Spain 7,12,137 16,93,443 24,05,580 6,91,557 16,22,086 23,13,643
53 Sweden 0 0 0 0 0 0
54 Switzerland 9,99,466 4,31,423 14,30,890 9,12,796 3,92,161 13,04,956
55 Thailand 21,201 44,023 65,224 20,317 44,529 64,846
56 Tunisia 4,602 16,010 20,612 4,330 16,442 20,773
57 Turkey 57,804 2,32,911 2,90,715 50,714 2,26,120 2,76,834
58 Ukraine 29,345 75,494 1,04,839 21,983 81,253 1,03,236
59 United Kingdom 80,71,790 26,77,095 1,07,48,884 69,80,002 24,08,010 93,88,012
60 United States 53,47,436 82,80,023 1,36,27,459 54,14,396 82,27,411 1,36,41,807
61 Uruguay 351 10,863 11,214 115 10,626 10,742

1 Debt service ratio is defined as total repayments of principal and interest on debt as a ratio of current receipts.

Ajit Prasad
Manager

Press Release : 2008-2009/2117


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