India’s external debt stood $8.5 bn higher at $482.9 bn in June

India's external debt at end-June 2015 stood at $482.9 billion, recording an increase of $8.5 billion or 1.8 per cent, over its level at end-March 2015, primarily on account of a rise in outstanding NRI deposits and commercial borrowings as per figures released by the Reserve Bank of India (RBI).

The increase in the magnitude of external debt was, however, partly offset by the valuation gains resulting from the appreciation of the US dollar vis-a-vis the Indian rupee and other major currencies, RBI noted.

The external debt-GDP ratio stood at 24.0 per cent at end-June 2015, recording an increase of 23.7 per cent over its level at end-March 2015.

Excluding valuation gains due to appreciation of the US dollar against the Indian rupee and other major currencies, the increase in external debt during the quarter would have been higher at $10.1 billion.

Commercial borrowings continued to be the largest component of external debt with a share of 38.4 per cent, followed by NRI deposits (24.8 per cent) and short-term trade credit (16.6 per cent).

The share of short-term debt (original maturity) in total debt witnessed a decline over the preceding quarter as well as over the corresponding quarter of the previous year as FII investment in Government treasury bills was phased out.

Accordingly, the ratio of short-term debt (original maturity) to foreign exchange reserves declined to 23.7 per cent as at end-June 2015 (24.8 per cent as at end-March 2015).

Similarly, on residual maturity basis, the ratio of short-term debt to foreign exchange reserves worked out to 51.9 per cent at end-June 2015 (54.2 per cent at end-March 2015).

The US dollar denominated debt continued to be the largest component of India's external debt with a share of 58.1 per cent at end-June 2015, followed by Indian rupee (28.4 per cent), SDR (5.9 per cent), Japanese Yen (3.9 per cent) and Euro (2.3 per cent).

Across borrower categories, the outstanding debt of government marginally declined whereas non-government debt increased and their shares in total external debt were 18.5 per cent and 81.5 per cent, respectively, at end-June 2015.

Debt service payments remained at 7.5 per cent as in the previous quarter.