India's external debt rises by 2.2% to $ 485.6 billion

The Ministry of Finance today released  the twenty second issue of the annual publication of India's external debt position till March 2016. 

India's external debt stock witnessed rise of 2.2% or $ 10.6 billion (approximately Rs 66960.2 crore) to $ 485.6 billion (excess of Rs 30.67 lakh crore approximately). This rise in external debt was led by increase in long-term debt particularly NRI deposits.

The external debt stock was around $ 475 billion ( almost Rs 3 lakh crore) in the year 2014-15 and $ 446.2 billion (Rs 28.18 lakh crore) in the year 2013-14.

Long term debt stood at $ 402.2 billion (Rs 25.40 lakh crore), increasing by 3.3% over the level of March 2015. It also saw its sequential rise in share to 82.8% of the total external debt against 82% of March 2015.

External debt of the country continues to be dominated by the long-term borrowings, stated Ministry of Finance. 

Short term debt declined by 2.5% to $ 83.4 billion (Rs 5.26 lakh crore) in this period, compared to $ 84.7 billion (Rs 5.35 lakh crore) at end-March 2015. It was on the back of trade related credit which declined in March 2016. Following the development, short term debt in terms of share also declined by 17.2% in March 2016 from 18% of March 2015. 

Also, government (sovereign) external debt stood at $ 93.4 billion (Rs 5.90 lakh crore) at end-March 2016, a rise of 4.12% against at $ 89.7 billion (Rs 5.66 lakh crore) at end-March 2015.

The sovereign external debt share remained muted near 18.9% in March 2016 from 18.8% in March 2015.

“India’s external debt has remained within manageable limits in 2015-16 as indicated by the increase in foreign exchange reserves to debt ratio to 74.2%, the external debt-GDP ratio of 23.7%, and fall in short term debt to 17.2%, said Department of Economics.

Foreign exchange reserve to total debt has significantly risen to 74.2% in March 2016, from 71.9% in the year 2014-15 and 68.2% 2013-14.

Further, the short-Term Debt to Foreign Exchange Reserves declined by 23.1% in the year 2015-16, compared to 25% in the 2014-15 and 30.1% in 2013-14.

While external debt to GDP declined sequentially to 23.7% in 2015-16, compared to 23.8% seen in previous two financial years.

Going ahead, debt to service ratio as on March 2016, increased to 8.8% against 7.6% of March 2015 and 5.9% of March 2014.

However, a cross country comparison based on “International Debt Statistics 2016” of the World Bank which presents the debt data for 2014, displayed that India continues to be among the less vulnerable countries with its external debt indicators comparing well with other indebted developing countries.