India’s External Debt as at the end of June 2005: Highlights

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પ્રકાશિત તારીખ સપ્ટેમ્બર 30, 2005

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India’s External Debt as at the end of June 2005: Highlights

India’s total external debt is placed at US $ 122.1 billion at the end of June 2005 (Chart 1).

At this level, the external debt stock declined by US $ 1.3 billion over the end-March 2005 level primarily reflecting the valuation effects of appreciation of US dollar vis-à-vis other major international currencies (Table 1).

Table 1: Variation in External Debt by Components

Item	At the end-of		Variation during the quarter
	June 05	March 05
	Amount	Amount	Absolute variation	% variation
	(US $ million)	(US $ million)	(US $ million)	(Per cent)
1. Multilateral	31,248 (25.6)	31,763 (25.7)	-515	-1.6
2. Bilateral	16,303 (13.3)	17,222 (14.0)	-919	-5.3
3. IMF	0 (0.0)	0 (0.0)	0	0
4. Trade Credit	5,216 (4.3)	4,960 (4.0)	256	5.2
5. Commercial Borrowings	27,158 (22.2)	26,942 (21.8)	216	0.8
6. NRI Deposits (long-term)	32,801 (26.8)	32,743 (26.5)	58	0.2
7. Rupee Debt	2,146 (1.8)	2,300 (1.9)	-154	-6.7
8. Long-Term Debt (1 to 7)	1,14,872 (94.0)	1,15,930 (93.9)	-1,058	-0.9
9. Short-Term Debt	7,275 (6.0)	7,524 (6.1)	-249	-3.3
*10.Total Debt (8+9)*	1,22,147 (100)	1,23,454 (100)	*-1,307*	*-1.1*

Figures in parenthesis indicate share to total debt

Among the various components of debt, multilateral and bilateral debt, rupee debt and short-term debt declined while trade credit, external commercial borrowings (ECBs) and NRI deposits rose during the first quarter of 2005-06 (Chart 2).

ECBs mainly took the form of syndicated loans and issues of bonds including foreign currency convertible bonds (FCCBs).

The US dollar continued to dominate the currency composition of India’s external debt (Chart 3).

Indicators of Debt Sustainability

The ratio of short-term to total debt posted a marginal decline. The ratio of short-term debt to foreign exchange reserves remained stable (Table 2).

Table 2: Indicators of Debt Sustainability

(in per cent)

*Indicators*	*End-June 05*	*End-Mar 05*
*Concessional debt/Total debt*	32.6	33.5
*Short-term/Total debt*	6.0	6.1
*Short-term debt/Reserves*	5.3	5.3
*Reserves/ Total debt*	113.3	114.7

India’s foreign exchange reserves exceeded the external debt by US $ 16.2 billion providing a cover of 113.3 per cent to the external debt stock at the end of June 2005 (Chart 4).