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 with a lag of one quarter and those for the quarters ending September and December by the Ministry of Finance, Government of India. The external debt data as at end-June 2017 in rupees and US dollars as well as revised data for earlier quarters are set out in Statements 1 and 2, respectively. The major developments relating to India’s external debt as at end-June 2017 are presented below.

Highlights

At end-June 2017, India’s external debt witnessed an increase of 3.0 per cent over its level at end-March 2017, primarily on account of an increase in inflow of foreign portfolio investment into the debt segment of domestic capital market encompassed under commercial borrowings. The increase in the magnitude of external debt was partly due to valuation loss resulting from the depreciation of the US dollar vis-à-vis the Indian rupee and other major currencies. The external debt to GDP ratio stood at 20.3 per cent as at end-June 2017, a shade higher than its level of 20.2 per cent at end-March 2017.

Major highlights pertaining to India’s external debt as at end-June 2017 are presented below:

• At end-June 2017, India’s external debt was placed at US$ 485.8 billion, recording an increase of US$ 13.96 billion over its level at end-March 2017 (Table 1).

• Valuation loss due to depreciation of the US dollar vis-à-vis the Indian rupee and other major currencies was placed at US$ 1.72 billion. Excluding the valuation effect, the increase in external debt would have been around US$ 12.24 billion instead of US$ 13.96 billion as at end-June 2017 over the level at end-March 2017.

• Commercial borrowings continued to be the largest component of external debt with a share of 37.8 per cent, followed by NRI deposits (24.3 per cent) and short-term trade credit (17.9 per cent).

• At end-June 2017, long-term debt was placed at US$ 397.0 billion, recording an increase of US$ 13.1 billion over its level at end-March 2017.

• The share of long-term debt in total external debt as at end-June 2017 was 81.7 per cent, marginally higher than its level of 81.4 per cent at end-March 2017.

• The share of short-term debt (original maturity) in total external debt decreased to 18.3 per cent at end-June 2017 from 18.6 per cent at end-March 2017. The ratio of short-term debt (original maturity) to foreign exchange reserves decreased to 23.0 per cent as at end-June 2017 (23.8 per cent at end-March 2017).

• On a residual maturity basis, short-term debt constituted 41.1 per cent of total external debt at end-June 2017 (41.5 per cent at end-March 2017) and stood at 51.6 per cent of total foreign exchange reserves (52.9 per cent at end-March 2017) (Table 2).

• US dollar denominated debt continued to be the largest component of India’s external debt with a share of 50.3 per cent as at end-June 2017, followed by the Indian rupee (35.4 per cent), SDR (5.8 per cent), Japanese yen (4.5 per cent) and Euro (3.0 per cent).

• The borrower-wise classification of the outstanding external debt shows that the Government as well as non-Government debt increased at end-June 2017 (Table 3).

• Debt service payments declined to 6.3 per cent of current receipts as at end-June 2017 as compared with 8.3 per cent at end-March 2017 (Table 4) - reflecting lower repayments of external commercial borrowings (ECBs).

Jose J. Kattoor
Chief General Manager

Press Release: 2017-2018/890