India's external debt rises to $663.8 bn; debt to GDP ratio falls: RBI

At end-March 2024, India's external debt was placed at $ 663.8 billion, an increase of $ 39.7 billion over its level at end-March 2023, according to RBI

India’s external debt at end-March 2024 was at $ 663.8 billion, recording an increase of $ 39.7 billion over its level at end-March 2023, according to data released by the Reserve Bank of India (RBI) on Tuesday.

The external debt to GDP ratio declined to 18.7 per cent at end-March 2024 from 19.0 per cent at end-March 2023, the RBI said.

The Central Bank said that if the valuation effect were excluded, external debt would have increased by $48.4 billion instead of $ 39.7 billion. Valuation efects are the changed in value of assets held abroad with regard to the value of domestic assets held by foreign investors

“Valuation effect due to the appreciation of the US dollar vis-à-vis the Indian rupee and other major currencies such as the yen, the euro and SDR amounted to $8.7 billion. Excluding the valuation effect, external debt would have increased by $48.4 billion instead of $39.7 billion at end-March 2024 over end-March 2023,” RBI said in a statement.

It further noted, "US dollar-denominated debt remained the largest component of India’s external debt, with a share of 53.8 per cent at end-March 2024, followed by debt denominated in the Indian rupee (31.5 per cent), yen (5.8 per cent), SDR (5.4 per cent), and euro (2.8 per cent)."

The RBI data shows that the general government debt rose 11.5 per cent year-on-year (Y-oY) as of March 2024. The households and nonprofit institutions serving households, on the other hand declined 16.5 per cent.

The apex bank data shows the share of outstanding debt of non-financial corporations in total external debt was the highest at 37.4 percent, with the general government having a 22.4 percent share.

"Loans remained the largest component of external debt, with a share of 33.4 per cent, followed by currency and deposits (23.3 per cent), trade credit and advances (17.9 per cent) and debt securities (17.3 per cent)," RBI said.