India’s external debt up at $305.9bn

Mumbai: India's external debt increased 17.2 per cent in 2010-11 to $305.9 billion primarily on account of high overseas corporate borrowings, short-term debt and multilateral borrowings.

External debt at the end of March 2010 was at $261 billion.

In a statement the Reserve Bank of India (RBI) said corporate overseas borrowings went up as much as 28.9 per cent while short-term borrowings increased by 21.2 per cent.

Though NRI deposits increased by 16.9 per cent, at $51.6 billion, multilateral debt increased by 15.8 per cent at $48.4 billion. The rise in NRI deposits was largely on account of increase in NRO deposits and FCNR (B) deposits and partly due to valuation effects, it said.

Debt service ratio declined to 4.2 per cent during 2010-11, as compared to 5.5 per cent a year ago.

Of the total debt, the long-term debt stood at $240.9 billion while short-term debt totalled $65 billion.

The RBI also said that the valuation effect reflecting the depreciation of the US dollar against other major global currencies and Indian rupee resulted in an increase in India's external debt by $6.5 billion during 2010-11. (See: India's current account deficit improves to $5.4 billion)