Wednesday, October 5, 2022

India’s external debt rose 8.2% in 2021-22 to $620 billion

India’s external debt rose by 8.2 per cent to stand at $620.7 billion on March 31, 2022, compared to $573.7 billon on March 31, 2021.

Out of this, 53.2 per cent of external debt was denominated in US dollars, the Indian rupee denominated debt was estimated at 31.2 per cent and was the second largest, according to the status report on India’s external debt 2021-22, released by the Finance Ministry on Monday.

According to the report, external debt, as a ratio to GDP, fell marginally to 19.9 per cent as on March 2022 compared to 21.2 per cent of the year ago period. Foreign currency reserves, as a ratio to external debt, stood slightly lower at 97.8 per cent as on March 2022, compared to 100.6 per cent of the year- ago period.

The long-term debt estimated at $499.1 billion, formed the largest chunk of 80.4 per cent, while the short-term debt, at $ 121.7 billion, accounted for 19.6 per cent of the total external debt amount. The short-term trade credit was predominantly in the form of trade credit (96 per cent) financing imports, the report added further.

Commercial borrowings, NRIs deposits, short-term trade credit and multilateral loans, all accounted for 90 per cent of the total external debt. While NRI deposits marginally contracted during end-March 2021 and end-March 2022, commercial borrowings, short-term trade credit and multilateral loans, on the other hand, expanded during the same period.

The rise in commercial borrowings, short-term trade credit and multilateral loans together was significantly larger than the contraction in NRI deposits, the report further said.

SourceIANS