Short debt's share in total external debt down 2.1 percentage points: RBI

Reflecting the country's robust external sector profile, the share of short-term debt with an original maturity of up to one year in total external debt declined to 18.5 per cent at end-March 2024 from 20.6 per cent at end-March 2023.

The ratio of short-term debt to foreign exchange reserves declined to 19.0 per cent at end-March 2024 from 22.2 per cent at end-March 2023, the Reserve Bank of India said in a statement today.

India’s external debt stood at $663.8 billion at the end of March 2024, an increase of $39.7 billion over its level at end-March 2023. The valuation effect due to the appreciation of the US dollar vis-à-vis the Indian rupee and other major currencies such as yen, the euro and Special Drawing Rights (SDRs) 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 added.

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 external debt to gross domestic product ratio declined to 18.7 per cent at end-March 2024 from 19.0 per cent at end-March 2023.

The long-term debt (with an original maturity of above one year) was $541.2 billion at the end of March 2024, recording an increase of $45.6 billion over its level at end-March 2023.

According to RBI data, 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).

Debt service obligations covering principal repayments and interest payments increased to 6.7 per cent of current receipts at end-March 2024 from 5.3 per cent at end-March 2023, reflecting higher debt service, it added.