- India’s external debt at end-June 2006 increased
by about US $ 6.9 billion over the end-March 2006 level to reach a level of
US $ 132.1 billion (Chart 1).
- All the components of external debt except rupee
debt have risen during the quarter (Table 1, Chart 2).
- Among the components of external debt, external
commercial borrowings (ECBs) recorded the largest increase (US $ 5.4 billion)
during the quarter (Table 1), reflecting strong domestic investment activity.
The increase is also partly attributed to the decline in the stock of ECBs
at end-March 2006. While gross disbursements under ECBs were high during 2005-06,
net disbursements had remained low on account of principal repayment of India
Millennium Deposits (IMDs). Under ECB, commercial bank loans and foreign currency
convertible bonds (FCCBs) account for the major increase during this quarter.
Table 1: Components of External
Debt
|
Item
|
At the end-of
|
Variation during the quarter
|
|
March 06
|
June 06
|
|
Amount
|
Amount
|
|
|
|
(US $ million)
|
(US $ million)
|
(US $ million)
|
(Per cent)
|
|
(1)
|
(2)
|
(3)
|
(4)
|
(5)
|
|
1. Multilateral
|
32,558
(26.0)
|
33,105
(25.1)
|
547
|
1.7
|
|
2. Bilateral
|
15,784
(12.6)
|
15,833
(12.0)
|
49
|
0.3
|
|
3. IMF
|
0
(0.0)
|
0
(0.0)
|
0
|
0.0
|
|
4. Trade Credit
|
|
|
|
|
|
a. Above 1 year
|
5,326
(4.3)
|
5,455
(4.1)
|
129
|
2.4
|
|
b. Upto 1 year*
|
8,788
(7.0)
|
9,196
(7.0)
|
408
|
4.6
|
|
5. Commercial Borrowings
|
25,560
(20.4)
|
30,975
(23.4)
|
5,415
|
21.2
|
|
6. NRI Deposits (long-term)
|
35,134
(28.1)
|
35,651
(27.0)
|
517
|
1.5
|
|
7. Rupee Debt
|
2,031
(1.6)
|
1,915
(1.4)
|
-116
|
-5.7
|
|
8.Total Debt
|
1,25,181
(100.0)
|
1,32,130
(100.0)
|
6,949
|
5.6
|
|
Memo Items
|
|
A. Long-Term Debt
|
1,16,393
(93.0)
|
1,22,934
(93.0)
|
6,541
|
5.6
|
|
B. Short-Term Debt
|
8,788
(7.0)
|
9,196
(7.0)
|
408
|
4.6
|
Figures in parenthesis indicate share to total
debt.
* Supplier's credits of up to 180 days are not
included.
- The currency composition of India’s external
debt at end-June 2006 revealed that US dollar continue to be the major currency,
accounting for 46.1 per cent of total external debt stock (Chart 3).
- There was a prepayment of external bilateral
debt amounting to US $ 59.2 million during April-June 2006.
Indicators of Debt Sustainability
- The external debt sustainability indicators
as set out in Table 2 suggest continued improvement in India's external
debt position.
Table 2: Indicators of Debt Sustainability(in
per cent)
|
Indicators
|
End-March 06
|
End-June 06
|
|
(1)
|
(2)
|
(3)
|
|
Short-term/Total debt
|
7.0
|
7.0
|
|
Short-term debt/Reserves
|
5.8
|
5.6
|
|
Concessional debt/Total debt
|
31.5
|
30.2
|
|
Reserves/ Total debt
|
121.1
|
123.3
|
- The share of concessional debt in total external
debt declined to 30.2 per cent at end-June 2006 from 31.5 per cent at end-March
2006. It may be recalled that this ratio was around 45.9 per cent at end-March
1991. This development indicates a gradual increase in non-concessional private
debt in India's external debt stock.
- India’s foreign exchange reserves exceeded the
external debt by US $ 30.8 billion providing a cover of 123.3 per cent to
the external debt stock at the end of June 2006 (Chart 4).
Full details of the evolution of
the debt stock over the period June 2005 to June 2006 are set out in Statement
1 and 2.
P.V.Sadanandan
Manager
Press Release : 2006-2007/450
|