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 data on external debt outstanding as at end-June 2010 along with revised data for the earlier quarters are set out in Statement 1 and 2. The major developments relating to India’s external debt as at end-June 2010 are presented in the following paragraphs. Major Highlights (i) India’s external debt, as at end-June 2010, was placed at US$ 273.1 billion recording an increase of US$ 10.8 billion or 4.1 per cent over the level at end-March 2010 on account of significant increase in short-term trade credits, commercial borrowings and multilateral government borrowings. (ii) Excluding the valuation effects due to appreciation of US dollar against other major international currencies and the Indian Rupee, the increase in external debt works out to US$ 12.1 billion over the quarter. (iii) The share of commercial borrowings stood highest at 27.3 per cent as at end-June 2010 followed by short-term debt (21.2 per cent), NRI deposits (17.6 per cent) and multilateral debt (16.4 per cent). (iv) Based on residual maturity, short-term debt accounted for 42.5 per cent of the total external debt as at end-June 2010, while the share of short-term debt, by original maturity, was 21.2 per cent. (v) The ratio of short-term debt to foreign exchange reserves rose to 21.0 per cent as at end-June 2010 from 18.8 per cent as at end-March 2010. (vi) External debt in terms of US dollar accounted for 59.8 per cent of the total external debt stock as at end-June 2010 followed by the Indian rupee (13.2 per cent). (vii) The ratio of foreign exchange reserves to external debt as at end June 2010 came down to 101.0 per cent from 106.4 per cent as at end-March 2010. 1. India’s External Debt as at end-June 2010 (i) India’s external debt, as at end-June 2010, was placed at US$ 273.1 billion recording an increase of US$ 10.8 billion or 4.1 per cent over the end-March 2010 level on account of significant increase in short-term trade credits, commercial borrowings and multilateral government borrowings. (ii) The long-term debt at US$ 215.2 billion and short-term debt at US$ 57.8 billion accounted for 78.8 per cent and 21.2 per cent, respectively, of the total external debt as at end-June 2010. (iii) The share of commercial borrowings continued to be the highest at 27.3 per cent in the total external debt as at end-June 2010 followed by short-term debt (21.2 per cent), NRI deposits (17.6 per cent) and multilateral debt (16.4 per cent) (Table 1).
Table 1 : External Debt by Component |
(US $ million) |
Item |
End- March |
End-June |
|
2008 |
2009 |
2010PR |
2009 |
2010 P |
1 |
2 |
3 |
4 |
5 |
6 |
1. Multilateral |
39,490 |
39,538 |
42,755 |
41,236 |
44,679 |
|
(17.6) |
(17.6) |
(16.3) |
(18.0) |
(16.4) |
2. Bilateral |
19,708 |
20,613 |
22,592 |
21,377 |
22,933 |
|
(8.8) |
(9.2) |
(8.6) |
(9.3) |
(8.4) |
3. IMF |
1120 |
1018 |
6041 |
1057 |
5885 |
|
(0.5) |
(0.5) |
(2.3) |
(0.5) |
(2.2) |
4. Trade Credit |
10,328 |
14,490 |
16,878 |
14,844 |
17,583 |
|
(4.6) |
(6.5) |
(6.4) |
(6.5) |
(6.4) |
5. ECBs |
62,334 |
62,413 |
71,967 |
62,961 |
74,465 |
|
(27.8) |
(27.8) |
(27.4) |
(27.4) |
(27.3) |
6. NRI Deposits |
43,672 |
41,554 |
47,890 |
44,579 |
48,108 |
|
(19.5) |
(18.5) |
(18.3) |
(19.4) |
(17.6) |
7. Rupee Debt |
2,017 |
1,527 |
1,657 |
1,607 |
1,584 |
|
(0.9) |
(0.7) |
(0.6) |
(0.7) |
(0.6) |
8. Long-term Debt (1to 7) |
178,669 |
181,153 |
209,780 |
187,662 |
215,237 |
|
(79.6) |
(80.7) |
(80.0) |
(81.7) |
(78.8) |
9. Short-term Debt |
45,738 |
43,362 |
52,471 |
42,029 |
57,841 |
|
(20.4) |
(19.3) |
(20.0) |
(18.3) |
(21.2) |
Total (8+9) |
224,407 |
224,515 |
262,251 |
229,691 |
273,078 |
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. |
2. Valuation Changes Compared with the previous quarter (end-March 2010), the valuation effect reflecting the appreciation of the US dollar against other major international currencies and the Indian rupee resulted in a decline of US$ 1.3 billion in India’s external debt. This implies that excluding the valuation effects, the stock of external debt as at end-June 2010 would have increased by US$ 12.1 billion over the level at end-March 2010 (Table 2).
Table 2: Valuation Effect on External Debt
|
US$ million) |
External debt end-June 2010 |
Total Variation over end-March 2010 |
Valuation
Loss(-)/Gain(+) |
Variation net of Valuation |
1 |
2 |
3 |
4= (2-3) |
2,73,078 |
10,826 |
-1,291 |
12,117 |
3. Components of External Debt Almost all the components of external debt registered increase over the quarter. While short term debt rose somewhat steeply by US$ 5.4 billion, the commercial borrowings and loans under external assistance (multilateral and bilateral debt) increased by US$ 2.5 billion and US$ 2.3 billion, respectively, as at end-June 2010 over end-March 2010 (Table 3).
Table 3: External Debt by Components – Outstanding and Variation |
(US$ million) |
Item |
Outstanding at the end-of |
Absolute variation |
Percentage Variation |
Jun 2009 |
Mar 2010 |
Jun 2010 P |
Jun-10 over
Jun-09 |
Jun-10 over
Mar-10 |
Jun-10 over
Jun-09
|
Jun-10 over
Mar-10 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
1. Multilateral |
41,236 |
42,755 |
44,679 |
3,443 |
1,924 |
8.3 |
4.5 |
2. Bilateral |
21,377 |
22,592 |
22,933 |
1,556 |
341 |
7.3 |
1.5 |
3. IMF |
1057 |
6041 |
5885 |
4,828 |
-156 |
456.8 |
-2.6 |
4. Trade Credit |
14,844 |
16,878 |
17,583 |
2,739 |
705 |
18.5 |
4.2 |
5.Commercial Borrowings |
62,961 |
71,967 |
74,465 |
11,504 |
2,498 |
18.3 |
3.5 |
6. NRI Deposits |
44,579 |
47,890 |
48,108 |
3,529 |
218 |
7.9 |
0.5 |
7. Rupee Debt |
1,607 |
1,657 |
1,584 |
-23 |
-73 |
-1.4 |
-4.4 |
8. Short-Term Debt |
42,029 |
52,471 |
57,841 |
15,812 |
5,370 |
37.7 |
10.2 |
Of which:
(i) Short-Term Trade Credit |
38,501 |
47,615 |
53,194 |
14,693 |
5,579 |
38.2 |
11.7 |
Total Debt (1 to 8) |
229,691 |
262,252 |
273,078 |
43,387 |
10,826 |
18.9 |
4.1 |
Memo Items |
|
A. Long-Term Debt (1 to 7) |
187,662 |
209,780 |
215,237 |
27,575 |
5,457 |
14.7 |
2.6 |
B. Short-Term Debt |
42,029 |
52,471 |
57,841 |
15,812 |
5,370 |
37.7 |
10.2 |
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 continues to be the largest component with a share of 59.8 per cent in the total external debt as at end-June 2010. The share of Indian rupee in the total external debt stock accounted for 13.2 per cent as at end-June 2010 followed by Japanese yen (11.5 per cent), SDR (10.0 per cent) and Euro (3.3) (Table 4).
Table 4: Currency Composition of External Debt |
(Percentage share in total external debt) |
|
End-March |
End-June |
Currency |
2008 |
2009 |
2010 |
2009 |
2010 P |
1 |
2 |
3 |
4 |
5 |
6 |
US Dollar |
55.3 |
54.1 |
53.3 |
54.4 |
59.8 |
SDR |
10.6 |
9.8 |
10.7 |
9.6 |
10.0 |
Indian Rupee |
16.2 |
15.4 |
18.7 |
14.3 |
13.2 |
Japanese Yen |
12.0 |
14.3 |
11.4 |
14.6 |
11.5 |
Euro |
3.5 |
4.1 |
3.6 |
4.4 |
3.3 |
Pound Sterling |
2.2 |
2.0 |
1.8 |
2.3 |
1.8 |
Others |
0.2 |
0.3 |
0.5 |
0.4 |
0.4 |
Total |
100 |
100 |
100 |
100 |
100 |
P: Provisional; PR : Partially Revised |
Source: Ministry of Finance, Government of India and Reserve Bank of India. |
5. Instrument-wise classification of External Debt (i) The instrument-wise classification of India’s external debt across the borrower category reveals that the share of loans in total debt outstanding remained at around 49 per cent as at end-June 2010, nearly the same as at end-March 2010 (Table 5). (ii) The share of trade credit (long-term and short-term) was 20.2 per cent and that of currency and deposits was 17.9 per cent in India’s total external debt showing a marginal increase over the quarter.
Table 5 : Instrument-wise Classification of External Debt Outstanding |
(US$ million) |
Sr. No. |
Borrower |
End-March 2010 |
End-June 2010 |
1 |
2 |
3 |
4 |
A. |
Government (1+2) |
67,066 |
68,911 |
1 |
Short-Term |
1519 |
1548 |
|
(i) Money Market Instruments |
1519 |
1548 |
2 |
Long-term {(i)+(ii)+(iii)} |
59,506 |
61,478 |
|
(i) Bonds and Notes |
3,026 |
3235 |
|
(ii) Loans |
55,101 |
56,857 |
|
(iii) Trade Credit |
1,379 |
1,386 |
3 |
Other debt liabilities |
6,041 |
5,885 |
|
IMF |
6,041 |
5,885 |
B. |
Monetary Authority |
695 |
639 |
1. |
Short-term |
695 |
639 |
|
(i) Currency and Deposits |
695 |
639 |
C. |
Non-Government (1+2) |
194,492 |
203528 |
1 |
Short-Term {(i)+(ii)} |
50,257 |
55,654 |
|
(i) Money Market Instruments |
2,642 |
2,460 |
|
(ii) Trade Credit |
47,615 |
53,194 |
2 |
Long-term {(i)+(ii)+(iii)+(iv)} |
144,235 |
147874 |
|
(i) Bonds and Notes |
22,356 |
22,314 |
|
(ii) Loans |
73,338 |
76,830 |
|
(iii) Currency and Deposits |
47,890 |
48,108 |
|
(iv) Trade Credits |
651 |
622 |
|
Total External Debt (A+B+C) |
262,253 |
273078 |
Source: Ministry of Finance, Government of India and Reserve Bank of India. |
6. Short-Term Debt by Original and Residual Maturity (i) Based on original maturity, the share of short-term debt stood at 21.2 per cent in the stock of total external debt as at end-June 2010 (Table 6). (ii) 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.
Table 6 : Short-Term Debt by Original Maturity |
(US $ million) |
| |
End-March |
End-June |
| |
2008 |
2009 |
2010 |
2009 |
2010 |
1 |
2 |
3 |
4 |
5 |
6 |
A |
Short-Term Debt |
45,738 |
43,362 |
52,471 |
42,029 |
57,841 |
|
a) NRI Deposits (up to 1 year maturity) @ |
- |
- |
- |
- |
- |
|
b) FC (B&O) Deposits (up to 1 year maturity) |
- |
- |
- |
- |
- |
|
c) Trade Related Credits |
41,901 |
39,964 |
47,615 |
38,501 |
53,194 |
|
(i) Above 6 months and up to 1year |
22,884 |
23,346 |
28,002 |
23,882 |
32,075 |
|
(ii) Up to 6 months |
19,017 |
16,618 |
19,613 |
14,619 |
21,119 |
|
d) FII Investments in Government Treasury Bills & other instruments |
651 |
2,065 |
3,357 |
2149 |
3,238 |
|
e) Investment in Treasury Bills by foreign central banks and international institutions etc. |
155 |
105 |
103 |
104 |
84 |
|
f) External Debt Liabilities of: |
3,031 |
1,228 |
1,396 |
1,275 |
1,325 |
|
(i) Central Bank |
1,115 |
764 |
695 |
769 |
639 |
|
(ii) Commercial Bank |
1,916 |
464 |
701 |
506 |
686 |
B |
Imports (during the year)* |
257,789 |
294,587 |
299,491 |
64,799 |
87,920 |
C |
Trade Credits to Imports (%) |
16.7 |
15.6 |
15.9 |
- |
- |
@: 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. |
*: On balance of payment basis. |
Source: Ministry of Finance, Government of India and Reserve Bank of India. |
(iii) Based on residual maturity, the short-term debt accounted for 42.5 per cent of total external debt as at end-June 2010. The ratio of short-term debt by residual maturity to foreign exchange reserves worked out to 42.1 per cent at end-June 2010 (Table 7).
Table 7: Residual Maturity of External Debt Outstanding as at End-June 2010 |
(US $ million) |
|
Short-term |
Long-term |
Total |
Components |
Up to one year |
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) |
4,195 |
4,400 |
4,686 |
54,081 |
67,362 |
2. External Commercial Borrowings (including trade credit) |
15,841 |
15,836 |
15,542 |
52,549 |
99,767 |
3. NRI deposits {(i)+(ii)+(iii)} |
38,085 |
5,752 |
2,959 |
1,312 |
48,108 |
(i) FCNR(B) |
11,035 |
1,854 |
1,078 |
402 |
14,369 |
(ii) NR(E)RA |
21,349 |
2,633 |
1,590 |
495.273 |
26,067 |
(iii) NRO |
5,700 |
1265.88 |
291.536 |
414.288 |
7,672 |
4. Short-term Debt* (Original maturity) |
57,841 |
0 |
0 |
0 |
57,841 |
Total (1 to 4) |
115,962 |
25,988 |
23,187 |
107,941 |
273,078 |
Memo Items |
|
|
|
|
|
Short-term debt (Residual maturity as per cent of total debt) |
42.5 |
|
|
|
|
Short-term debt (Residual maturity as per cent of Reserves) |
42.1 |
|
|
|
|
* Also includes short-term component of sovereign debt amounting to US$ 1548 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 June 30, 2010. |
Source: Ministry of Finance, Government of India and Reserve Bank of India. |
7. Government and Non-Government External Debt (i) Government (Sovereign) external debt stood at US$ 68.9 billion as at end-June 2010 as against US$ 67.1 billion as at end-March 2010. The shares of Government and non-Government external debt in the total external debt were 25.2 per cent and 74.8 per cent, respectively, as at end-June 2010 (Table 8).
Table 8: Government and Non-Government External Debt |
(US $ million) |
Sr. No. |
Components |
End-March |
End-June |
2008 |
2009 |
2010 |
2010 |
1 |
2 |
3 |
4 |
5 |
6 |
A. |
Sovereign Debt (I+II) |
58,068 |
54,795 |
67,065 |
68911 |
|
(As a percentage of GDP) |
4.7 |
5.0 |
4.8 |
|
I. |
External Debt on Government Account under External Assistance |
52,538 |
51755 |
55232 |
57050 |
II. |
Other Government External Debt @ |
5,530 |
3040 |
11833 |
11860 |
B. |
Non-Government Debt # |
166,339 |
169720 |
195188 |
204167 |
|
(As a percentage of GDP) |
13.4 |
15.5 |
14.1 |
|
C. |
Total External Debt (A+B) |
224,407 |
224,515 |
262,252 |
273078 |
|
(As a percentage of GDP) |
18.1 |
20.5 |
18.9 |
|
@: 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 |
8. Select Indicators of External Debt (i) India’s foreign exchange reserves provided a cover of 101.0 per cent to the external debt stock at the end of June 2010 as compared to 106.4 per cent as at end-March 2010. (ii) The share of concessional debt in total external debt continued to decline and stood at 15.9 per cent as at end-June 2010 as compared to 16.7 per cent at end-March 2010. (iii) The ratio of short-term debt to foreign exchange reserves at 21.0 per cent as at end-June 2010 was higher than that of 18.8 per cent as at end March 2010. (iv) The share of short-term debt in total debt increased marginally to 21.2 per cent at end-June 2010 (Table 9).
Table 9: India’s Key External Debt Indicators |
Year |
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 |
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 |
18.0 |
16.1** |
101.2 |
35.8 |
3.9 |
4.0 |
2004-05 |
134.0 |
18.1 |
5.9^ |
106.4 |
30.7 |
12.5 |
13.3 |
2005-06 |
139.1 |
16.7 |
10.1# |
109.0 |
28.4 |
12.9 |
14.1 |
2006-07 |
172.4 |
17.5 |
4.7 |
115.6 |
23.0 |
14.1 |
16.3 |
2007-08 |
224.4 |
18.1 |
4.7 |
138.0 |
19.7 |
14.8 |
20.4 |
2008-09 |
224.5 |
20.5 |
4.4 |
112.2 |
18.7 |
17.2 |
19.3 |
2009-10PR |
262.3 |
18.9 |
5.5 |
106.4 |
16.7 |
18.8 |
20.0 |
end-June 10P |
273.1 |
|
|
101.0 |
15.9 |
21.0 |
21.2 |
P: Provisional; PR : Partially Revised. |
* 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. |
Ajit Prasad
Assistant General Manager Press Release : 2010-2011/452 |
