India's External Debt Decreases by $3.9 Billion at June-End: RBI
The Reserve Bank of India (RBI) has stated that India's external debt stood at $554.5 billion by the end of June, recording a decrease of $3.9 billion over its level at the end of March 2020. Further, the external debt to GDP ratio increased to 21.8 percent at the end of June 2020 from 20.6 percent as on March 31.
Valuation loss due to the depreciation of the US dollar vis-a-vis major currencies such as euro, yen and SDR was at $0.7 billion. 'Excluding the valuation effect, the decrease in external debt would have been $4.5 billion instead of $3.9 billion at the end of June 2020 over end of March 2020,' the central bank said.
As per the data, commercial borrowings remained the largest component of external debt, with a share of 38.1 percent, followed by non-resident deposits (23.9 percent) and short-term trade credit (18.2 percent). As on June 30, long-term debt (with original maturity of above one year) was placed at $ 449.5 billion, recording a decrease of $ 2 billion over its level at end of March, the central bank said.
The share of short-term debt in total external debt declined to 18.9 percent as on June 30 from 19.1 percent at end of March. The Reserve Bank said the US dollar denominated debt remained the largest component of India's external debt, with a share of 53.9 percent at end of June followed by the Indian rupee (31.6 percent), yen (5.7 percent), SDR (4.5 percent) and the euro (3.5 percent).
The instrument-wise classification shows that the loans were the largest component of external debt, with a share of 35.4 percent, followed by currency and deposits, trade credit and advances and debt securities. Further, the borrower-wise classification shows that the outstanding debt of both government and non-government sectors decreased at end of June 2020. RBI also said debt service (principal repayments plus interest payments) increased to 8.1 percent of current receipts at end of June 2020 as compared with 6.5 percent at end of March 2020, reflecting lower current receipts.