India’s external debt at the end of April-June 2023 was placed at $629.1 billion, recording an increase of $4.7 billion over its level at end-March 2023 according to data released by the Reserve Bank of India (RBI) on Thursday.
The external debt to GDP ratio declined to 18.6% at end-June 2023 from 18.8% at end-March 2023.
Valuation effect due to the appreciation of the U.S. dollar vis-à-vis the major currencies such as yen and SDR amounted to $3.1 billion.
Excluding the valuation effect, external debt would have increased by $7.8 billion instead of $4.7 billion at end-June 2023 over end-March 2023, RBI said.
At end-June 2023, long-term debt (with original maturity of above one year) was placed at $505.5 billion, recording an increase of US$ 9.6 billion over its level at end-March 2023.
The share of short-term debt (with original maturity of up to one year) in total external debt declined to 19.6% at end-June 2023 from 20.6 per cent at end-March 2023.
Similarly, the ratio of short-term debt (original maturity) to foreign exchange reserves declined to 20.8% at end-June 2023 (22.2% at end-March 2023).
Short-term debt on residual maturity basis (i.e., debt obligations that include long- term debt by original maturity falling due over the next twelve months and short- term debt by original maturity) constituted 42.8% of total external debt at end-June 2023 (44% at end-March 2023) and stood at 45.3% of foreign exchange reserves (47.4% at end-March 2023).
U.S. dollar-denominated debt remained the largest component of India’s external debt, with a share of 54.4% at end-June 2023, followed by debt denominated in the Indian rupee (30.4%), SDR (5.9%), yen (5.7%), and the euro (3%), RBI data show.
Outstanding debt of the general government decreased, while non-government
debt increased at end-June 2023.
The share of outstanding debt of non-financial corporations in total external debt was the highest at 39.8%, followed by deposit-taking corporations (except the central bank) (26.6%) general government (21.1%) and other financial corporations (7.6%).
Loans remained the largest component of external debt, with a share of 32.9% followed by currency and deposits (22.9%), trade credit and advances (19%) and debt securities (16.8%).
Debt service (i.e., principal repayments and interest payments) increased to 6.8% of current receipts at end-June 2023 as compared with 5.3% at end-March 2023, reflecting higher debt service.