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India's external debt rises $11.5 billion in Oct-Dec 2021 to $614.9 billion

External debt that must be repaid in 2022 rose to 44.4 percent of India's total external debt as on December 31 from 43.2 percent at the end of September 2021, accounting for 43.1 percent of the foreign exchange reserves.

March 31, 2022 / 03:08 PM IST
Represenative Image

Represenative Image

India's external debt rose $11.5 billion in October-December 2021 to stand at $614.9 billion at the end of the quarter, according to data released by the Ministry of Finance on March 31.

However, as a percentage of the Gross Domestic Product (GDP), the external debt declined slightly to 20 percent from 20.3 percent as at the end of September 2021.

The appreciation of the US dollar against other major currencies such as the euro and yen helped limit the rise in the external debt.

"Excluding the valuation effect, the increase in external debt would have been $13.2 billion instead of an increase of $11.5 billion at end-December 2021 over end-September 2021," the finance ministry said.

As much as 52.0 percent of the external debt was denominated in US dollars as at the end of December 2021. Rupee debt constituted 32 percent, while that in yen and euro made up 5.3 percent and 3.1 percent, respectively.

The majority of the external debt is private. General government external debt stood at $131.4 billion as on December 31, down from $132.0 billion as at the end of September 2021. Non-government external debt, meanwhile, rose to $483.6 billion from $471.4 billion.

Commercial borrowings continue to form the largest chunk of the external debt, with a share of 36.8 percent. Non-resident deposits follow with 23.1 percent and and short-term trade credit is the third-largest component at 18.0 percent.

In terms of maturity, debt with an original maturity of up to one year rose to 18.6 percent of the total external debt from 17.4 percent as on September 30. While this is a small number, short-term debt on a residual maturity basis - debt that must be repaid in the next 12 months irrespective of original maturity - rose to 44.4 percent of the total from 43.2 percent at the end of September 2021.

In absolute terms, the external debt due in 2022 amounts to $273.0 billion.

The finance ministry said India's external debt "continues to be sustainable and prudently managed", with the short-term debt, on a residual maturity basis, accounting for 43.1 percent of the foreign exchange reserves as on December 31.

As on December 31, 2021As on September 30, 2021
External debt$614.9 billion$603.4 billion
    Government debt$131.4 billion$132.0 billion
    Private debt$483.6 billion$471.4 billion
Commercial borrowing$226.4 billion$224.9 billion
NRI deposits$141.9 billion$141.6 billion
Short-term trade credit$110.5 billion$101.6 billion
Multilateral debt$71.5 billion$71.3 billion
Bilateral debt$30.7 billion$30.9 billion

Siddharth Upasani
first published: Mar 31, 2022 03:08 pm