India’s external debt rises to $326.6 bn at end-September

India's external debt stock stood at $326.6 billion towards the close of the second quarter ended 31 September 2011-12, reflecting an increase of 6.6 per cent over the level of $306.4 billion at end-March 2011.

The rise in external debt has been largely due to increase in external commercial borrowings, export credits and short-term debt, according to an official statement.

Short-term debt accounted for 21.9 per cent of India's external debt at end-September 2011 while the rest (78.1 per cent) was long-term.

Component-wise, the share of external commercial borrowings stood highest at 30.3 per cent in total external debt, followed by NRI deposits (16.0 per cent) and multilateral debt (15.0 per cent).

During the five years between end-March 2006 and end-March 2011, commercial borrowings have recorded a compound annual growth rate of 27.4 per cent. This, coupled with the falling value of the rupee, has increased the country's debt servicing burden in rupee terms. This, in turn, could impact the profitability and the balance sheets of corporate borrowers.

The government (sovereign) had a share of 24.3 per cent in the country's total external debt while non-government share in the country's external debt stood at 75.7 per cent at end-September 2011.