India's External Debt as at the end of March 2005 - આરબીઆઈ - Reserve Bank of India
India's External Debt as at the end of March 2005
Major Highlights
- India’s total external debt is placed at US $ 123.3 billion at the end of March 2005 (Chart 1).
- In nominal terms the external debt stock increased by US $ 11.6 billion (10.4 per cent) during 2004-05 - the highest accretion in any single year starting from 1990-91.
- The US dollar continued to dominate the currency composition of India’s external debt (Chart 2).
- External commercial borrowings (ECB), trade credits (short-term and long-term), multilateral debt and NRI deposits were the key drivers to the growth in the external debt stock.
- Bilateral and rupee debt have recorded a decline (Chart 3).
- The rise in ECB by around US $ 5 billion during the year reflected strong investment demand domestically as well as favourable financing conditions overseas.
- ECB mainly took the form of syndicated loans and issues of bonds including foreign currency convertible bonds (FCCBs), as spreads on emerging market bonds narrowed down substantially.
- Short-term debt recorded the highest growth (69.8 per cent) during the year reflecting the sharp rise in both POL and non-POL imports (Table 1).
- External assistance (both concessional and non- concessional) to the Government from multilateral agencies increased substantially during 2004-05.
Table 1: Variation in External Debt by Components
Item |
At the end-of |
Variation during the year |
||||
|
March 05 |
March 04 |
|
|
||
|
|
Share in |
|
Share in |
Absolute |
Percentage |
|
Amount |
total debt |
Amount |
total debt |
variation |
variation |
|
(US $ million) |
(Per cent) |
(US $ million) |
(Per cent) |
(US $ million) |
(Per cent |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
Multilateral |
31763 |
25.8 |
29288 |
26.2 |
2475 |
8.5 |
Bilateral |
17222 |
14.0 |
17278 |
15.5 |
-56 |
-0.3 |
IMF |
0 |
0.0 |
0 |
0.0 |
0 |
0.0 |
Trade Credit |
4960 |
4.0 |
4680 |
4.2 |
280 |
6.0 |
Commercial Borrowings |
26942 |
21.8 |
22101 |
19.8 |
4841 |
21.9 |
NRI Deposits (long-term) |
32599 |
26.4 |
31216 |
27.9 |
1383 |
4.4 |
Rupee Debt |
2300 |
1.9 |
2721 |
2.4 |
-421 |
-15.5 |
Long-Term Debt (1 to 7) |
115786 |
93.9 |
107284 |
96.0 |
8502 |
7.9 |
Short-Term Debt |
7524 |
6.1 |
4431 |
4.0 |
3093 |
69.8 |
Total Debt (8+9) |
123310 |
100 |
111715 |
100 |
11595 |
10.4 |
|
|
|
|
|
|
|
- There was a prepayment of debt amounting to US $ 35.1 million in 2004-05 as compared with prepayments of US $ 3.8 billion and US $ 2.9 billion in 2003-04 and 2002-03, respectively.
Indicators of External Debt
- The ratio of short-term to total debt posted a modest rise. This was also reflected in an upward movement in the ratio of short-term debt to foreign exchange reserves (Table 2).
Table 2: Indicators of Debt Sustainability
Indicators |
End-Mar 05 |
End-Mar 04 |
Concessional debt/Total debt(%) |
33.5 |
36.1 |
Short-term/Total debt (%) |
6.1 |
4.0 |
Short-term debt/Reserves (%) |
5.3 |
3.9 |
Reserves/ Total debt (%) |
114.8 |
101.1 |
External Debt / GDP (%) |
17.4 |
17.8 |
- India’s foreign exchange reserves exceeded the external debt by US $ 18.2 billion providing a cover of 114.8 per cent to the external debt stock at the end of March 2005 (Chart 4).
Full details of the evolution of the debt stock over the period March 2004 to March 2005 are set out in Statement 1 and 2.
P.V. Sadanandan
Manager
Press Release: 2004-2005/1392