As per the standard practice, India's external debt statistics for the quarters ending March and June are released by the Reserve Bank of India with a lag of one quarter and those for the quarters ending September and December by the Ministry of Finance, Government of India. The external debt data as at end-June 2016 in rupees and US dollars as well as revised data for earlier quarters are set out in Statements 1 and 2, respectively. The major developments relating to India’s external debt as at end-June 2016 are presented below. Highlights At end-June 2016, India’s external debt witnessed a decline of 1.1 per cent over its level at end-March 2016, primarily on account of a decline in commercial borrowings. The decline in the magnitude of external debt was partly due to valuation gains resulting from the appreciation of the US dollar vis-a-vis the Indian rupee and other major currencies. The external debt to GDP ratio stood at 23.4 per cent as at end-June 2016, a shade lower than its level of 23.7 per cent at end-March 2016. Major highlights pertaining to India’s external debt as at end-June 2016 are presented below: -
At end-June 2016, India’s external debt was placed at US$ 479.7 billion, recording a decline of US$ 5.4 billion over its level at end-March 2016 (Table 1). -
Valuation gains due to appreciation of the US dollar against the Indian rupee and other major currencies was placed at US$ 1.4 billion. Excluding the valuation effect, the decline in external debt would have been US$ 4.0 billion instead of US$ 5.4 billion as at end-June 2016 over the level at end-March 2016. -
Commercial borrowings continued to be the largest component of external debt with a share of 36.6 per cent, followed by NRI deposits (26.3 per cent) and short-term trade credit (16.6 per cent). -
At end-June 2016, long-term debt was placed at US$ 397.6 billion, recording a decline of US$ 4.1 billion over its level at end-March 2016. The share of long-term debt in total external debt was marginally higher at 82.9 per cent as at end-June 2016 as compared to its level at end-March 2016. -
The share of short-term debt (original maturity) in total debt witnessed a marginal decline over its level at end-March 2016. The ratio of short-term debt (original maturity) to foreign exchange reserves declined to 22.6 per cent as at end-June 2016 (23.1 per cent at end-March 2016). -
On a residual maturity basis, short-term debt constituted 42.4 per cent of total external debt at end-June 2016 (42.6 per cent at end-March 2016) and stood at 55.9 per cent of total foreign exchange reserves (57.4 per cent at end-March 2016) (Table 2). -
US dollar denominated debt continued to be the largest component of India’s external debt with a share of 57.1 per cent as at end-June 2016, followed by the Indian rupee (28.6 per cent), SDR (5.9 per cent), Japanese yen (4.8 per cent) and Euro (2.4 per cent). -
The borrower classification shows that the outstanding debt of the Government increased; however, non-Government debt declined at end-June 2016 (Table 3). -
Debt service payments declined to 7.5 per cent of current receipts as at end-June 2016 as compared with 8.8 per cent at end-March 2016 (Table 4). Table 1: External Debt - Outstanding and Variation | (US$ billion) | Component | Outstanding at the end of | Absolute variation | Percentage variation | June 2015 R | March 2016 PR | June 2016 P | Jun-16 over Jun-15 | Jun-16 over Mar-16 | Jun-16 over Jun-15 | Jun-16 over Mar-16 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 1. Multilateral | 53.4 | 54.0 | 54.5 | 1.1 | 0.5 | 2.0 | 0.9 | 2. Bilateral | 21.2 | 22.5 | 24.0 | 2.7 | 1.5 | 13.0 | 6.6 | 3. IMF | 5.6 | 5.6 | 5.6 | 0.0 | 0.0 | -0.5 | -0.7 | 4. Trade Credit | 11.9 | 10.7 | 10.6 | -1.3 | -0.1 | -11.2 | -1.1 | 5.Commercial Borrowings | 185.0 | 180.8 | 175.7 | -9.3 | -5.1 | -5.0 | -2.8 | 6. NRI Deposits | 119.9 | 126.9 | 126.3 | 6.4 | -0.7 | 5.3 | -0.5 | 7. Rupee Debt | 1.4 | 1.3 | 1.1 | -0.3 | -0.2 | -21.7 | -14.3 | 8. Short-term Debt | 83.6 | 83.4 | 82.1 | -1.6 | -1.3 | -1.9 | -1.6 | Of which | | | | | | | | Short-term Trade Credit | 79.3 | 80.0 | 79.7 | 0.4 | -0.3 | 0.5 | -0.4 | Total Debt | 482.0 | 485.1 | 479.7 | -2.4 | -5.4 | -0.5 | -1.1 | Memo Items | A. Long-term Debt | 398.4 | 401.7 | 397.6 | -0.8 | -4.1 | -0.2 | -1.0 | B. Short-term Debt | 83.6 | 83.4 | 82.1 | -1.6 | -1.3 | -1.9 | -1.6 | P: Provisional. PR: Partially Revised. R: Revised | Table 2: Residual Maturity of External Debt Outstanding as at End-June 2016 | (US$ billion) | Component | Short-term up to one year | Long-term | Total (2 to 5) | 1 to 2 years | 2 to 3 years | More than 3 years | 1 | 2 | 3 | 4 | 5 | 6 | 1. Sovereign Debt (Long-term) $ | 4.4 | 6.2 | 6.6 | 77.3 | 94.6 | 2. Commercial Borrowings # | 26.2 | 20.3 | 23.2 | 107.0 | 176.8 | 3. NRI Deposits {(i)+(ii)+(iii)} | 90.5 | 13.1 | 11.3 | 11.4 | 126.3 | (i) FCNR(B) | 33.1 | 2.7 | 6.1 | 3.2 | 45.1 | (ii) NR(E)RA | 48.9 | 9.6 | 4.9 | 7.8 | 71.2 | (iii) NRO | 8.4 | 0.8 | 0.3 | 0.5 | 10.0 | 4. Short-term Debt* (Original maturity) | 82.1 | | | | 82.1 | Total (1 to 4) | 203.2 | 39.5 | 41.2 | 195.8 | 479.7 | Memo Items | Short-term Debt (Residual maturity) as per cent of Total External Debt | 42.4 | Short-term Debt (Residual maturity) as per cent of Reserves | 55.9 | $: Inclusive of FII Investments in Government Securities. #: Commercial Borrowings are inclusive of trade credit, FII investments in corporate debt instruments and a portion of non-Government multilateral and bilateral borrowings and therefore may not tally with the figures provided in other Tables under original maturity. *: Also includes FII investments in sovereign debt and commercial paper. | Table 3: Government and Non-Government External Debt | (US$ billion) | Component | End-March | End-June | 2014 | 2015 | 2016 PR | 2016 P | 1 | 2 | 3 | 4 | 5 | A. Sovereign Debt (I+II) | 83.7 | 89.7 | 93.4 | 94.7 | (As a percentage of GDP) | 4.4 | 4.5 | 4.6 | 4.6 | I. External Debt on Government Account under External Assistance | 62.2 | 58.5 | 61.1 | 63.3 | II. Other Government External Debt @ | 21.5 | 31.3 | 32.4 | 31.4 | B. Non-Government Debt # | 362.5 | 385.3 | 391.6 | 385.0 | (As a percentage of GDP) | 19.3 | 19.3 | 19.1 | 18.8 | C. Total External Debt (A+B) | 446.2 | 475.0 | 485.1 | 479.7 | (As a percentage of GDP) | 23.8 | 23.8 | 23.7 | 23.4 | P: Provisional. PR: Partially Revised. @: Other Government external debt includes Defence Debt, Investment in Treasury Bills/ Government Securities by FIIs, Foreign Central Banks and International Institutions and IMF. #: Includes external debt of Monetary Authority. | Table 4: India’s Key External Debt Indicators | End-March | External Debt (US $ billion) | Ratio of External Debt to GDP (per cent) | Debt Service Ratio (per cent) | Ratio of Foreign Exchange Reserves to Total Debt (per cent) | Ratio of Concessional Debt to Total Debt (per cent) | Ratio of Short-Term Debt to Foreign Exchange Reserves (per cent) | Ratio of Short-Term Debt to Total Debt (per cent) | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 1991 | 83.8 | 28.7 | 35.3 | 7.0 | 45.9 | 146.5 | 10.2 | 1996 | 93.7 | 27.0 | 26.2 | 23.1 | 44.7 | 23.2 | 5.4 | 2001 | 101.3 | 22.5 | 16.6 | 41.7 | 35.4 | 8.6 | 3.6 | 2006 | 139.1 | 16.8 | 10.1# | 109.0 | 28.4 | 12.9 | 14.0 | 2007 | 172.4 | 17.5 | 4.7 | 115.6 | 23.0 | 14.1 | 16.3 | 2008 | 224.4 | 18.0 | 4.8 | 138.0 | 19.7 | 14.8 | 20.4 | 2009 | 224.5 | 20.3 | 4.4 | 112.2 | 18.7 | 17.2 | 19.3 | 2010 | 260.9 | 18.2 | 5.8 | 106.9 | 16.8 | 18.8 | 20.1 | 2011 | 317.9 | 18.2 | 4.4 | 95.9 | 14.9 | 21.3 | 20.4 | 2012 | 360.8 | 21.1 | 6.0 | 81.6 | 13.3 | 26.6 | 21.7 | 2013 | 409.5 | 22.4 | 5.9 | 71.3 | 11.1 | 33.1 | 23.6 | 2014 | 446.2 | 23.8 | 5.9 | 68.2 | 10.4 | 30.1 | 20.5 | 2015 | 475.0 | 23.8 | 7.6 | 71.9 | 8.8 | 25.0 | 18.0 | 2016 PR | 485.1 | 23.7 | 8.8 | 74.3 | 9.0 | 23.1 | 17.2 | End-June 2016 P | 479.7 | 23.4 | 7.5 | 75.8 | 9.4 | 22.6 | 17.1 | P: Provisional. PR: Partially Revised. # works out to 6.3 per cent with the exclusion of India Millennium Deposits (IMDs) repayments of US $ 7.1 billion and pre-payment of external debt of US $ 23.5 million. | Ajit Prasad Assistant Adviser Press Release : 2016-2017/824 | |