India's external debt down 2.7% at 471.9 bn at end-March 2017

India's external debt witnessed a decline of 2.7 per cent as of end-March 2017, over its level at end-March 2016, primarily on account of a decline in non-resident Indian (NRI) deposits and commercial borrowings, RBI data showed.

The decline in the magnitude of external debt was partly due to valuation loss resulting from the depreciation of the US dollar vis-à-vis the Indian rupee. The external debt to GDP ratio stood at 20.2 per cent as of end-March 2017, lower than its level of 23.5 per cent at end-March 2016.

India's external debt at end-March 2017 stood at $471.9 billion, showing a decline of $13.1 billion over its level at end-March 2016.

Valuation loss due to depreciation of the US dollar vis-à-vis the Indian rupee was placed at $1.5 billion. Excluding the valuation effect, the decline in external debt would have been $14.6 billion instead of $13.1 billion as at end-March 2017 over the level at end-March 2016.

Commercial borrowings continued to be the largest component of external debt with a share of 36.7 per cent, followed by NRI deposits (24.8 per cent) and short-term trade credit (18.3 per cent).

At end-March 2017, long-term debt was placed at $383.9 billion, a decline of $17.7 billion over its level at end-March 2016.

The share of long-term debt in total external debt as of end-March 2017 was 81.4 per cent, lower than 82.8 per cent at end-March 2016.

The share of short-term debt (original maturity) in total external debt increased to 18.6 per cent as of end-March 2017 from 17.2 per cent at end-March 2016.

The ratio of short-term debt (original maturity) to foreign exchange reserves increased to 23.8 per cent as of end-March 2017 (23.1 per cent at end-March 2016).

On a residual maturity basis, short-term debt constituted 41.5 per cent of total external debt as of end-March 2017 (42.7 per cent at end-March 2016) and stood at 52.9 per cent of total foreign exchange reserves (57.4 per cent at end-March 2016).

US dollar denominated debt continued to be the largest component of India's external debt with a share of 52.1 per cent as at end-March 2017, followed by the Indian rupee (33.6 per cent), SDR (5.8 per cent), Japanese yen (4.6 per cent) and Euro (2.9 per cent).

The borrower classification shows that the outstanding debt of the government increased; however, non-government debt declined as of end-March 2017.

Debt service payments declined to 8.3 per cent of current receipts as of end-March 2017 compared with 8.9 per cent at end-March 2016.