India's FY10 external debt up 16.5% to $261.4 bn

India's external debt rose 16.5 per cent to $261.4 billion at the end of 2009-10 compared to the previous year due to higher commercial borrowings, NRI deposits and increased liabilities to the IMF, according to data released by the Reserve Bank of India (RBI) today.

According to the data, India's external debt stood at $224.5 billion at the end of March, 2009.

The RBI said the jump in external debt was "on account of a significant increase in IMF liabilities due to additional allocations of SDR, commercial borrowings, NRI deposits and short-term trade credits".

The share of commercial borrowings stood at 27.2 per cent of total debt, while NRI deposits accounted for 18.4 per cent and multilateral debt 16.3 per cent.

While the share of short-term debt in the total liabilities of India stood at 20.1 per cent, long-term debt constituted the remaining 79.9 per cent.

This is commendable, since a higher proportion of short-term debt is not considered good for a country, as was seen in the East-Asian crisis in the 1990s.

India's foreign exchange reserves provided a cover of 106.7 per cent to the external debt stock at the end of March, 2010, compared to 112.2 per cent in end-March, 2009.

If the depreciating value of the dollar against the rupee and other major global currencies is not taken into account, India's external debt has increased by $30.4 billion over the previous fiscal.