India's external debt climbs 2.4 per cent to $229.9 billion in FY'09
23 Sep 2009
India's external debt stock stood at $229.9 billion as of end-March 2009, up $5.3 billion (2.4 per cent) during 2008-09 compared with an increase of $53.2 billion (31.1 per cent) during 2007-08.
Net inflow of external commercial borrowings (ECBs) into the country fell to $8.2 billion in 2008-09 from a level of $22.6 billion in 2007-08. Net inflows of short-term trade credit also turned negative at $5.8 billion during 2008-09 as compared with an inflow of $17.2 billion during 2007-08.
Banking capital excluding NRI deposits also recorded an outflow of $7.7 billion in 2008-09 against a net inflow of $11.6 billion under this head in 2007-08.
In addition to the direct impact on debt flows, the cost of funds increased sharply on account of tight liquidity conditions in the international financial markets, according to an official release.
Furthermore, the depreciation in the rupee exchange rate against major international currencies in 2008-09 resulted in higher debt service payments in rupee terms, the release noted.
The lower growth in India's external debt during 2008-09 was on account of valuation effect due to an appreciation of the US dollar vis-à-vis other major international currencies, and moderation in debt components, particularly commercial borrowings and short-term trade credits reflecting the impact of tightness in international capital markets due to the global financial crisis, an official release said today.