India's external debt mounts to $571.3 bn, up $1.6 bn QoQ

The country's external debt at the end of June stood at $571.3 billion, marking an increase of $1.6 billion over its level at the end-March, the Reserve Bank of India (RBI) said on Thursday. On the other hand, the external debt-to-Gross Domestic Product (GDP) ratio for the same period fell to 20.2 per cent from 21.1 per cent at the end of March.

The apex bank said that the valuation gain due to the appreciation of the US dollar vis-à-vis the rupee was placed at US$ 1.7 billion. On excluding the valuation effect, the external debt would have mounted by US$ 3.3 billion instead of US$ 1.6 billion at end-June 2021 over end March 2021, the RBI added.

The largest component of external debt was commercial borrowing, which had a share of 37.4 per cent, followed by non-resident deposits at 24.8 per cent and short-term trade credit at 17.4 per cent.

The long-term debt with an original maturity of above one year was up $0.2 billion from the March-end level to and stood at $468.5 billion at the end of June. On the other hand, the share of the short-term debt in the total external debt went up marginally from 17.7 per cent to 17.9 per cent, however, the ratio of short-term debt (original maturity) to foreign exchange reserves declined to 16.8 per from 17.5 per cent.

As per RBI, the largest component of India's external debt continued to be the US dollar-denominated debt, with a share of 52.4 per cent at the end-June 2021, followed by the Indian rupee at 33.2 per cent, Yen at 5.8 per cent, SDR2 at 4.4 per cent and the Euro at 3.4 per cent. When classified in terms of instruments, loans stood as the largest component of external debt, with a share of 34.7 per cent, followed by currency and deposits at 25 per cent, trade credit and advances at 17.9 per cent and debt securities 16.9 per cent.

Edited by Akashdeep Baruah

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