India’s external debt increased 12.8 per cent to $295.8 billion at the end of September 2010 from $262.3 billion at the end of March, on account of rise in overseas borrowings by companies and strengthening of the Indian currency. The long-term debt increased by 9.5 per cent to $229.8 billion, while short-term debt showed an increase of 25.8 per cent to $66 billion.
Of the total increase of $33.5 billion in the country’s external debt at the end of September, the valuation effect arising from depreciation of the US dollar against major international currencies accounted for $6.3 billion, or about 18.8 per cent. Excluding the valuation effect, the increase in external debt would have been $27.2 billion, the finance ministry said in a statement today.
Short-term debt accounted for 22.3 per cent of India’s total external debt, while the remaining 77.7 per cent was long-term debt. Component-wise, the share of commercial borrowings stood at the highest level, at 27.8 per cent, followed by NRI deposits (16.9 per cent) and multilateral debt (15.8 per cent).
“Government (Sovereign) external debt was $72.3 billion (24.4 per cent of total external debt) at the end of September, as against $67.1 billion (25.6 per cent) at the end of March,” said the statement.
The share of dollar-denominated debt was the highest in external debt stock, at 53.9 per cent, followed by the Indian rupee (18.8 per cent), Japanese Yen (11.8 per cent), SDR (9.8 per cent) and euro (3.6 per cent). The ratio of short-term external debt to foreign exchange reserves was 22.5 per cent at the end of September, compared to 18.8 per cent at the end of March.
