India's external debt rose 2.6% to $557.4 billion in April-June FY20

India’s external debt rose 2.6 per cent at end-June 2019 from its level at end-March 2019, primarily on account of an increase in commercial borrowings, non-resident deposits, and short-term trade credit, RBI stated in its report on India’s external debt.

The increase in external debt was also due to valuation losses resulting from the depreciation of the US dollar against Indian rupee and other major currencies. The external debt to GDP ratio remained at 19.8 per cent at end-June 2019, the same as its level at end-March 2019.
At end-June 2019, India’s external debt stood at $557.4 billion, recording an increase of $14.1 billion over its level at end-March 2019.
Valuation losses due to the depreciation of the US dollar vis-à-vis Indian rupee and other major currencies were placed at $1.7 billion. Excluding the valuation effect, the increase in external debt would have been $12.4 billion instead of $14.1 billion at end-June 2019.
Commercial borrowings remained the largest component of external debt, with a share of 38.4 per cent, followed by non-resident deposits (24.0 per cent) and short-term trade credit (18.7 per cent).
At end-June 2019, long-term debt (with original maturity of above one year) was placed at $447.7 billion, recording an increase of $12.8 billion over its level at end-March 2019.
The share of short-term debt (with original maturity of up to one year) in total external debt declined to 19.7 per cent at end-June 2019 from 20.0 per cent at end-March 2019 while the ratio of short-term debt (original maturity) to foreign exchange reserves declined to 25.5 per cent at end-June 2019 (26.3 per cent at end-March 2019).
Short-term debt on a residual maturity basis (ie, debt obligations that include long-term debt by original maturity falling due over the next twelve months and short-term debt by original maturity) constituted 43.2 per cent of total external debt at end-June 2019 (43.3 per cent at end-March 2019) and stood at 56.0 per cent of foreign exchange reserves (57.0 per cent at end-March 2019).
US dollar denominated debt continued to be the largest component of India’s external debt, with a share of 51.5 per cent at end-June 2019, followed by the Indian rupee (34.7 per cent), yen (5.1 per cent), SDR (4.7 per cent) and the euro (3.2 per cent).
The borrower-wise classification shows that the outstanding debt of both government and non-government sectors increased at end-June 2019.
The share of outstanding debt of nonfinancial corporations in total external debt was the highest at 41.6 per cent, followed by deposit-taking corporations (except the central bank) (29.8 per cent), general government (19.2 per cent) and other financial corporations (6.2 per cent).
The instrument-wise classification shows that loans were the largest component of external debt, with a share of 34.9 per cent, followed by currency and deposits (24.5 per cent), trade credit and advances (19.2 per cent) and debt securities (17.1 per cent).
Debt service (principal repayments plus interest payments) declined to 5.8 per cent of current receipts at end-June 2019 compared with 6.4 per cent at end-March 2019, reflecting lower repayments of commercial borrowings, RBI stated.