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India’s External Debt as at the end of June 2016

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 Statement #1 and Statement #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 offset by 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