India’s external debt hits 20 per cent of GDP at $346 billion

The ratio of India's total external debt to the country's gross domestic product (GDP) stood at 20 per cent while its debt service ratio stood at 6 per cent of GDP.

India's external debt stock at end-March 2012 stood at $345.8 billion, increasing by $39.9 billion (13 per cent) over the end-March 2011 level of $305.9 billion. The rise could be attributed mainly to increase in commercial borrowings, short-term debt and non-resident Indian deposits.

The long-term external debt at $267.6 billion at end-March 2012 reflected an increase of 11.1 per cent, while the short-term debt at $78.2 billion increased by 20.3 per cent over the level of end-March 2011. The long-term debt accounted for 77.4 per cent of total external debt at end-March 2012.

At end-March 2012, the share of commercial borrowings in the country's total external debt stock stood at 30.2 per cent, followed by short-term debt (22.6 per cent), NRI deposits (16.9 per cent) and multilateral debt (14.6 per cent).

''The rising share of commercial borrowing over the years is an indication of a maturing market economy and the increasing role that the corporate sector is playing in sustaining the growth of the economy,'' according to the official 'India's External Debt: A Status Report 2011-12', released today.

Government (sovereign) external debt stood at $81.9 billion at end-March 2012 vis-a-vis $78.1 billion at end-March 2011. The share of government external debt in total external debt was lower at 23.7 per cent at end-March 2012 as compared to 25.5 per cent at end-March 2011.