The stock of external debt at end-June 2019 in rupees and US dollars as well as revised data for earlier quarters are set out in Statements I (old format) and II (IMF’s 2013 External Debt Statistics (EDS) Guide format)¹. The major developments relating to India’s external debt as at end-June 2019 are presented below.

Highlights

At end-June 2019, India’s external debt witnessed an increase of 2.6 per cent over its level at end-March 2019, primarily on account of an increase in commercial borrowings, non-resident deposits, and short-term trade credit. The increase in external debt was also contributed by valuation losses resulting from the depreciation of the US dollar against Indian rupee and other major currencies. The external debt to GDP ratio remained at 19.8 per cent at end-June 2019, the same as its level at end-March 2019.

Major highlights pertaining to India’s external debt at end-June 2019 are presented below:

• At end-June 2019, India’s external debt was placed at US$ 557.4 billion, recording an increase of US$ 14.1 billion over its level at end-March 2019 (Table 1).

• Valuation losses due to the depreciation of the US dollar vis-à-vis Indian rupee and other major currencies were placed at US$ 1.7 billion. Excluding the valuation effect, the increase in external debt would have been US$ 12.4 billion instead of US$ 14.1 billion at end-June 2019 over end-March 2019.

• Commercial borrowings remained the largest component of external debt, with a share of 38.4 per cent, followed by non-resident deposits (24.0 per cent) and short-term trade credit (18.7 per cent).

• At end-June 2019, long-term debt (with original maturity of above one year) was placed at US$ 447.7 billion, recording an increase of US$ 12.8 billion over its level at end-March 2019.

• The share of short-term debt (with original maturity of up to one year) in total external debt declined to 19.7 per cent at end-June 2019 from 20.0 per cent at end-March 2019; the ratio of short-term debt (original maturity) to foreign exchange reserves declined to 25.5 per cent at end-June 2019 (26.3 per cent at end-March 2019).

• Short-term debt on a residual maturity basis (i.e., debt obligations that include long-term debt by original maturity falling due over the next twelve months and short-term debt by original maturity) constituted 43.2 per cent of total external debt at end-June 2019 (43.3 per cent at end-March 2019) and stood at 56.0 per cent of foreign exchange reserves (57.0 per cent at end-March 2019) (Table 2).

• US dollar denominated debt continued to be the largest component of India’s external debt, with a share of 51.5 per cent at end-June 2019, followed by the Indian rupee (34.7 per cent), yen (5.1 per cent), SDR (4.7 per cent) and the euro (3.2 per cent).

• The borrower-wise classification shows that the outstanding debt of both government and non-government sectors increased at end-June 2019 (Table 3).

• The share of outstanding debt of nonfinancial corporations in total external debt was the highest at 41.6 per cent, followed by deposit-taking corporations (except the central bank) (29.8 per cent), general government (19.2 per cent) and other financial corporations (6.2 per cent).

• The instrument-wise classification shows that the loans were the largest component of external debt, with a share of 34.9 per cent, followed by currency and deposits (24.5 per cent), trade credit and advances (19.2 per cent) and debt securities (17.1 per cent).

• Debt service (principal repayments plus interest payments) declined to 5.8 per cent of current receipts at end-June 2019 as compared with 6.4 per cent at end-March 2019, reflecting lower repayments of commercial borrowings (Table 4).

(Yogesh Dayal)     
Chief General Manager

Press Release : 2019-2020/820

¹ The concepts set out in the IMF’s 2013 EDS Guide are harmonized with those of the System of National Accounts (SNA) 2008 and the sixth edition of the IMF’s Balance of Payments and International Investment Position Manual (BPM6) published in 2009.