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Date : Jun 30, 2014
India’s External Debt as at the end of March 2014

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 2014 in Rupees and US dollar terms and revised data for the earlier quarters are set out in Statements 1 and 2, respectively. The major developments relating to India’s external debt as at end-March 2014 are presented in the following paragraphs.

Highlights

India’s external debt as at end-March 2014 showed an increase of US$ 31.2 billion over the year, mainly led by the special swap scheme introduced by RBI for the commercial banks to mobilise FCNR(B) and overseas borrowings. The borrowings under the Swap Scheme in combination with a decline in CAD and revival in equity flows helped in building up the foreign exchange reserves.

On the other hand, increase in the magnitude of external debt was partly offset by the valuation change (gain) resulting from appreciation of US dollar against Indian rupee and other international currencies. Further, share of short term debt in total debt in terms of original maturity as well as residual maturity also declined due to net repayments of short-term debt and withdrawal of FII investment from debt securities during 2013-14.

The major developments relating to India’s external debt as at end-March 2014 are set out below:

  • India’s external debt, as at end-March 2014, was placed at US$ 440.6 billion showing an increase of US$ 31.2 billion or 7.6 per cent over the level at end-March 2013. The increase in total external debt during financial year 2013-14 was primarily on account of rise in Non-Resident Deposits (Table 1).

  • The surge in outstanding stock of NRI deposits can mainly be attributed to mobilisation of fresh FCNR(B) deposits by commercial banks under the swap scheme offered by the Reserve Bank during September to November 2013.

  • In terms of major components, the share of external commercial borrowings continued to be the highest at 33.3 per cent of total external debt, followed by NRI deposits (23.6 per cent) and short term debt (20.3 per cent).

  • The share of short-term debt in total debt witnessed a decline over the preceding quarter as well as the corresponding quarter of the previous year. Short-term debt at US$ 89.2 billion accounted for 20.3 per cent of the total external debt as at end-March 2014 as compared to 23.6 per cent at end-March 2013.

  • The ratio of short-term debt (original maturity) to foreign exchange reserves declined to 29.3 per cent as at end-March 2014 from 33.1 per cent as at end-March 2013.

  • Based on residual maturity, the short-term debt accounted for 39.6 per cent of total external debt as at end-March 2014 as compared to 42.1 per cent at end-March 2013. Within the short-term debt based on residual maturity, the share of NRI deposits was the highest at 31.4 per cent. The ratio of short-term debt by residual maturity to foreign exchange reserves worked out to 57.4 per cent at end-March 2014 (Table 2).

  • The valuation gain during 2013-14 amounted to US$ 9.4 billion reflecting the appreciation of US dollar against the Indian rupee and other major currencies. Thus, excluding the valuation gains, the stock of external debt as at end-March 2014 would have increased by US$ 40.6 billion instead of US$ 31.2 billion over end-March 2013

  • US dollar denominated debt continued to be the largest component of India’s external debt with a share of 61.8 per cent as at end-March 2014, followed by Indian rupee (21.1 per cent), SDR (6.9 per cent), Japanese Yen (5.1 per cent) and Euro (3.4 per cent).

  • Government (Sovereign) external debt stood at US$ 81.5 billion as at end-March 2014 as against US$ 81.7 billion as at end-March 2013. The shares of Government and non-Government external debt in the total external debt were 18.5 per cent and 81.5 per cent, respectively, as at end-March 2014 (Table 3).

Table 1: External Debt - Outstanding and Variation

(US$ billion)

Memo Items

Outstanding end-of March

Absolute variation

Percentage variation

2012 R

2013 PR

2014 P

Mar-12 to Mar-13

Mar-13 to Mar-14

Mar-12 to Mar-13

Mar-13 to Mar-14

1

2

3

4

5

6

7

8

1. Multilateral

50.5

51.6

53.3

1.1

1.7

2.3

3.3

2. Bilateral

26.9

25.2

24.8

-1.7

-0.4

-6.4

-1.4

3. IMF

6.2

6.0

6.2

-0.2

0.2

-3.2

3.2

4. Export Credit

19.0

17.7

15.3

-1.3

-2.5

-6.6

-13.9

5.Commercial Borrowings

120.1

140.2

146.5

20.0

6.4

16.7

4.5

6. NRI Deposits

58.6

70.8

103.8

12.2

33.0

20.8

46.6

7. Rupee Debt

1.4

1.3

1.5

-0.1

0.2

-7.1

16.7

8. Short term Debt

78.2

96.7

89.2

18.5

-7.5

23.7

-7.7

Of which

Short term trade credit

65.1

86.8

81.7

21.7

-5.0

33.3

-5.8

Total Debt

360.8

409.4

440.6

48.7

31.2

13.5

7.6

Memo Items

A. Long-Term Debt

282.6

312.7

351.4

30.1

38.7

10.7

12.4

B. Short-Term Debt

78.2

96.7

89.2

18.5

-7.5

23.7

-7.7

P: Provisional. PR: Partially Revised. R: Revised

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


Table 2: Residual Maturity of External Debt Outstanding as at End-March 2014

(US $ billion)

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) $

5.7

5.9

6.2

61.1

79.0

2. External Commercial Borrowings #

24.9

22.9

25.0

95.8

168.6

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

54.8

7.5

24.6

17.0

103.8

(i) FCNR(B)

13.0

2.0

18.7

8.1

41.8

(ii) NR(E)RA

34.3

4.9

5.3

8.4

52.9

(iii) NRO

7.5

0.6

0.5

0.5

9.1

4. Short-term Debt (Original maturity)

89.2

0.0

0.0

0.0

89.2

Total (1 to 4)

174.6

36.3

55.8

173.9

440.6

Memo Items

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

39.6

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

57.4

$: Inclusive of FII Investments in Government Securities.
#: External Commercial Borrowings in this table also include (i) Trade Credits (ii) Non-Government defence debt & (iii) a portion of non-Government multilateral and bilateral borrowing, hence 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, 2014.
Source: Ministry of Finance, Government of India and Reserve Bank of India.


Table 3: Government and Non-Government External Debt

(US $ billion)

Sr. No.
Components

End-March

2008

2009

2010

2011R

2012 PR

2013 PR

2014 PR

1

2

3

4

5

6

7

8

A. Sovereign Debt (I+II)

58.1

55.9

67.1

78.1

81.9

81.7

81.5

(As a percentage of GDP)

4.7

5.1

4.7

4.5

4.7

4.4

4.3

I. External Debt on Government Account under External Assistance

52.5

51.8

55.2

62.3

63.4

61.3

62.2

II. Other Government External Debt @

5.5

4.1

11.8

15.8

18.5

20.3

19.3

B. Non-Government Debt #

166.3

168.6

193.9

239.8

278.9

327.8

359.1

(As a percentage of GDP)

13.3

15.2

13.6

13.7

15.8

17.6

19.0

C. Total External Debt (A+B)

224.4

224.5

260.9

317.9

360.8

409.4

440.6

(As a percentage of GDP)

18.0

20.3

18.3

18.2

20.5

22.0

23.3

@: 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


Table 4: 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

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

317.9

18.2

4.4

95.9

14.9

21.3

20.4

2012PR

360.8

20.5

6.0

81.6

13.3

26.6

21.7

2013PR

409.4

22.0

5.9

71.3

11.1

33.1

23.6

2014P

440.6

23.3

5.9

69.0

10.5

29.3

20.3

P: Provisional. PR: Partially Revised. R: Revised

# 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

Sangeeta Das
Director

Press Release : 2013-2014/2536


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