India’s overseas debt rises modestly to $629 billion as of end June

2023-09-28 14:32:36

India’s external debt rose modestly by 2.7 percent to $629 billion as of end June over the same period a year ago as NRI deposits picked up, with other major components almost remaining flat over the period according to the preliminary numbers released by the Reserve Bank.

NRI deposits as reflected in debt from “Deposit-taking Corporations, except the Central Bank” increased 6.5 percent in the June quarter to $167 billion from $157 billion a year ago. While outstanding overseas borrowings as reflected in debt from “Non-financial corporations remained flat at $250 billion” remained flat at $ 250 billion over the period. The RBI data also indicated that outstanding debt of the general government decreased, while non-government debt increased at end-June 2023.

Short-term debt on residual maturity basis – 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 per cent of total external debt at end-June 2023 compared to 44.0 per cent at end-March 2023 and stood at 45.3 per cent of foreign exchange reserves compared to 47.4 per cent at end-March 2023.

US dollar-denominated debt remained the largest component of India’s external debt, with a share of 54.4 per cent at end-June 2023, followed by debt denominated in the Indian rupee (30.4 per cent), SDR (5.9 per cent), yen (5.7 per cent), and the euro (3.0 per cent).

The external debt to GDP ratio declined to 18.6 per cent at end-June 2023 from 18.8 per cent at end-March 2023. Debt service (i.e., principal repayments and interest payments) increased to 6.8 per cent of current receipts at end-June 2023 as compared with 5.3 per cent at end-March 2023, reflecting higher debt service.

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