India's external debt increased 2.6 percent to USD 543 billion at end-March 2019, primarily on account of a rise in short-term debt, commercial borrowings, and non-resident Indian (NRI) deposits, the RBI said on Friday.
The increase in external debt was partially offset by valuation gain resulting from the appreciation of the US dollar against the Indian rupee and other major currencies.
"At end-March 2019, India's external debt was placed at USD 543.0 billion, recording an increase of USD 13.7 billion over its level at end-March 2018," the central bank said.
The external debt-to-GDP ratio stood at 19.7 percent at end-March 2019, lower than 20.1 percent at end-March 2018. The RBI said valuation gain due to the appreciation of the US dollar vis-a-vis Indian rupee and other major currencies was placed at USD 16.7 billion.
Therefore, excluding the valuation effect, the increase in external debt would have been USD 30.4 billion instead of USD 13.7 billion at end-March 2019 over end-March 2018. Commercial borrowings were the largest component of external debt, with a share of 38 percent, followed by NRI deposits (24 percent) and short-term trade credit (18.9 percent).
"At end-March 2019, long-term debt (with original maturity of above one year) was placed at USD 434.6 billion, recording an increase of USD 7.5 billion over its level at end-March 2018," the RBI said.
Short-term debt on a residual maturity basis constituted 43.4 percent of total external debt at end-March 2019 (42 percent at end-March 2018) and stood at 57.0 percent of foreign exchange reserves (52.3 percent at end-March 2018).
The central bank further said US dollar denominated debt continued to be the largest component of India's external debt with a share of 50.5 percent at end-March 2019, followed by the rupee (35.7 per cent), Japanese yen (5 percent), SDR (4.9 percent) and euro (3 percent).
Debt service declined to 6.4 percent of current receipts at end-March 2019 as compared to 7.5 percent at end-March 2018, reflecting lower repayments of commercial borrowings, it added.