India's external debt rises to US$ 557.4 billion end-June 2019

Valuation losses were placed at US$ 1.7 billion in Q1 of 2019-20

India's external debt was placed at US$ 557.4 billion end-June 2019, recording an increase of US$ 14.1 billion over its level at end-March 2019. Valuation losses due to the depreciation of the US dollar vis-vis Indian rupee and other major currencies were placed at US$ 1.7 billion. Excluding the valuation effect, the increase in external debt would have been US$ 12.4 billion instead of US$ 14.1 billion at end-June 2019 over end-March 2019.

Commercial borrowings remained the largest component of external debt, with a share of 38.4%, followed by non-resident deposits (24.0%) and short-term trade credit (18.7%).

 

At end-June 2019, long-term debt (with original maturity of above one year) was placed at US$ 447.7 billion, recording an increase of US$ 12.8 billion over its level at end-March 2019.

The share of short-term debt (with original maturity of up to one year) in total external debt declined to 19.7% at end-June 2019 from 20.0% at end-March 2019; the ratio of short-term debt (original maturity) to foreign exchange reserves declined to 25.5% at end-June 2019 (26.3% at end-March 2019).

Short-term debt on a residual maturity basis (i.e., debt obligations that include long-term debt by original maturity falling due over the next twelve months and short-term debt by original maturity) constituted 43.2% of total external debt at end-June 2019 (43.3% at end-March 2019) and stood at 56.0% of foreign exchange reserves (57.0% at end-March 2019).

US dollar denominated debt continued to be the largest component of India's external debt, with a share of 51.5% at end-June 2019, followed by the Indian rupee (34.7%), yen (5.1%), SDR (4.7%) and the euro (3.2%).

The share of outstanding debt of non-financial corporations in total external debt was the highest at 41.6%, followed by deposit-taking corporations (except the central bank) (29.8%), general government (19.2%) and other financial corporations (6.2%).

The instrument-wise classification shows that the loans were the largest component of external debt, with a share of 34.9%, followed by currency and deposits (24.5%), trade credit and advances (19.2%) and debt securities (17.1%).

Debt service (principal repayments plus interest payments) declined to 5.8% of current receipts at end-June 2019 as compared with 6.4% at end-March 2019, reflecting lower repayments of commercial borrowings.

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