The Reserve Bank of India today released India's External Debt Highlights as on June 30, 2004.

• At US $ 112.6 billion at the end of June 2004, India’s total external debt increased marginally by US $ 121 million over the end-March 2004 level (Chart 1).

• Excluding valuation effects on account of the appreciation of the US dollar against other major international currencies, the stock of external debt would have increased by about US $ 2 billion. Measured in rupees, the external debt stock rose by 5.9 per cent during April-June, 2004.
• The US dollar continued to dominate the currency composition of India’s external debt (Chart 2).

• Among the components, multilateral debt, external commercial borrowings and short-term debt increased while all other components recorded a decline (Chart 3).

Chart 3: Composition of External Debt

• Short-term debt recorded the highest expansion (US $ 1.2 billion or 24.7 per cent) during the quarter, reflecting the substantial increase in both POL and non-POL imports (Table 1).

Table 1: Variation in External Debt by Component

(US $ million)

Item	End June’04	End March’04	Variation during the quarter
			Absolute variation	Percentage Variation
(1)	(2)	(3)	(4)	(5)
1. Multilateral	29,705	29,614	91	0.3
2. Bilateral	17,149	17,489	-340	-1.9
3. IMF	0	0	-	-
4.Export Credit	4,464	4,588	-124	-2.7
5.Commercial Borrowings#	22,316	22,163	153	0.7
6. NRI Deposits (long-term)	30,785	31,216	-431	-1.4
7. Rupee debt	2,309	2,709	-400	-14.8
8. Long-Term Debt (1 to 7)	1,06,728	1,07,779	-1,051	-1.0
9. Short-Term Debt	5,908	4,736	1,172	24.7
10. Total Debt (8+9)	1,12,636	1,12,515	121	0.1

# Includes net investment by 100 % FII debt funds.

Indicators of External Debt

• Among the key indicators of the sustainability of external debt, the ratio of short-term to total debt posted a modest rise which 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-June’04	End-Mar’04
Concessional debt/Total debt(%)	35.4	35.8
Short-term/Total debt (%)	5.2	4.2
Short-term debt/Reserves (%)	4.9	4.2
Reserves to Total debt (%)	106.1	100.4

 

• India’s foreign exchange reserves exceeded the external debt by US $ 6.9 billion providing a cover of 106.1 per cent to the external debt stock at the end of June 2004 (Chart 4).

 

 

Full details of the evolution of the debt stock over the period June 2003 to June 2004 are set out in Statement 1 and 2.

 

P. V. Sadanandan

Manager

Press Release : 2004-2005/360