India’s External Debt as at the end of March 2020

The stock of external debt at end-March 2020 as well as revised data for earlier quarters are set out in Statements I (old format) and II (IMF format)¹. The major developments relating to India’s external debt as at end-March 2020 are presented below.

Highlights

At end-March 2020, India’s external debt was placed at US$ 558.5 billion, recording an increase of US$ 15.4 billion over its level at end-March 2019 (Table 1).

Valuation gains due to the appreciation of the US dollar vis-à-vis Indian rupee and other major currencies were placed at US$ 16.6 billion. Excluding the valuation effect, the increase in external debt would have been US$ 32.0 billion instead of US$ 15.4 billion at end-March 2020 over end-March 2019.

Commercial borrowings remained the largest component of external debt, with a share of 39.4 per cent, followed by non-resident deposits (23.4 per cent) and short-term trade credit (18.2 per cent).

At end-March 2020, long-term debt (with original maturity of above one year) was placed at US$ 451.7 billion, recording an increase of US$ 17.0 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 19.1 per cent at end-March 2020 from 20.0 per cent at end-March 2019; the ratio of short-term debt (original maturity) to foreign exchange reserves declined to 22.4 per cent at end-March 2020 (26.3 per cent at end-March 2019).

Short-term debt on residual maturity basis (i.e., 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 42.4 per cent of total external debt at end-March 2020 (43.4 per cent at end-March 2019) and stood at 49.5 per cent of foreign exchange reserves (57.0 per cent at end-March 2019) (Table 2).

US dollar denominated debt continued to be the largest component of India’s external debt, with a share of 53.7 per cent at end-March 2020, followed by the Indian rupee (31.9 per cent), yen (5.6 per cent), SDR (4.5 per cent) and the euro (3.5 per cent).

The borrower-wise classification shows that the outstanding debt of general government decreased, while that of non-government sector increased at end-March 2020 (Table 3).

The share of outstanding debt of nonfinancial corporations in total external debt was the highest at 42.0 per cent, followed by deposit-taking corporations (except the central bank) (28.3 per cent), general government (18.1 per cent) and other financial corporations (7.5 per cent).

The instrument-wise classification shows that the loans were the largest component of external debt, with a share of 34.8 per cent, followed by currency and deposits (24.0 per cent), trade credit and advances (18.7 per cent) and debt securities (17.4 per cent).

Debt service (principal repayments plus interest payments) increased marginally to 6.5 per cent of current receipts at end-March 2020 as compared with 6.4 per cent at end-March 2019, reflecting higher interest payments on commercial borrowings and lower current receipts (Table 4).

(Yogesh Dayal)     
Chief General Manager

Press Release: 2019-2020/2570

¹ The concepts set out in the IMF’s 2013 External Debt Statistics (EDS) Guide are harmonized with those of the System of National Accounts (SNA) 2008 and the sixth edition of the IMF’s Balance of Payments and International Investment Position Manual (BPM6) published in 2009.

SOURCE: RBI