India’s external debt as of March 31, 2014, showed an increase of $31.2 billion over the year to $440.6 billion, according to the Reserve Bank of India. The increase in total external debt during 2013-14 was primarily on account of the rise in non-resident deposits.

As of March 2014, NRI deposits rose $33 billion to $103.8 billion on the back of the special swap scheme introduced by the RBI for commercial banks during September to November 2013 to mobilise FCNR (B) deposits.

External debt comprises memo items, such as commercial borrowings, NRI deposits, short-term debt as well as multilateral and bilateral debt. The share of government and non-government external debt stood at $81.5 billion ($81.7 billion as of March 2013) and $359.1 billion ($327.8 billion) respectively.

In terms of major components, the share of external commercial borrowings continued to be the highest at 33.3 per cent of total external debt, followed by NRI deposits (23.6 per cent) and short term debt (20.3 per cent).

According to the RBI, the share of short-term debt in the total debt witnessed a decline over the preceding quarter as well as the corresponding quarter of the previous year. Short-term debt at $89.2 billion accounted for 20.3 per cent of the total external debt as of March 2014, as compared to 23.6 per cent as of March 2013. The ratio of short-term debt (original maturity) to foreign exchange reserves declined to 29.3 per cent as of March 2014 from 33.1 per cent as of March 2013.

The valuation gain during 2013-14 amounted to $ 9.4 billion, reflecting the appreciation of the US dollar against the Indian rupee and other major currencies. Thus, excluding the valuation gains, the stock of external debt as of March 2014 would have increased by $40.6 billion instead of $31.2 billion over March 2013.

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