India's external debt up nearly 13% at $390 bn in FY13

India's external debt rose $44.6 billion or 12.9 per cent to $390 billion as of end-March 2013 compared to the level at end-March 2012, primarily on account of a rise in short-term trade credit.

There has been a sizeable increase in external commercial borrowings (ECBs) and rupee denominated non-resident Indian deposits as well, data released by the Reserve Bank of India (RBI) showed.

Excluding the valuation gains due to the appreciation of the US dollar against major international currencies and the Indian rupee, India's external debt as of end-March 2013 would have increased by $55.8 billion over end-March 2012, RBI noted.

In terms of major components, the share of external commercial borrowings continued to be the highest at 31.0 per cent of total external debt, followed by short term debt (24.8 per cent) and NRI deposits (18.2 per cent).

The share of short-term debt in total debt, by original maturity, was 24.8 per cent. Based on residual maturity, short-term debt accounted for 44.2 per cent of the total external debt as at end-March 2013. Of this, the share of NRI deposits was 28.4 per cent.

The ratio of short-term debt (original maturity) to foreign exchange reserves rose to 33.1 per cent as of end-March 2013 from 26.6 per cent as of end-March 2012.

The debt denominated in US dollar continued to account for the highest share of 57.2 per cent in total external debt as of end-March 2013, followed by that denominated in Indian rupee (24.0 per cent) and SDR (7.5 per cent).

The ratio of foreign exchange reserves to external debt as at end-March 2013 at 74.9 per cent was lower than the level of end-March 2012 (85.2 per cent).

Almost all the major components of the external debt recorded a rise during the year except bilateral, IMF, exports credits and rupee debt.

External debt on account of commercial borrowings increased by $16.1 billion during 2012-13 as compared with $16.3 billion in 2011-12. Trade credit components of external debt (both long-term and short-term) showed an increase of $20.3 billion as of end-March 2013 over end-March 2012.

Short-term debt increased by $18.5 billion to $96.7 billion as of end-March 2013 from $78.2 billion as of end-March 2012 mainly on account of an increase in short-term trade credit.

NRI deposits increased by $12.2 billion to $70.8 billion as  of end-March 2013 over the level as of end-March 2012 primarily on account of an increase in rupee denominated NRI deposits, reflecting the impact of a deregulation of interest rates on these deposits in December 2011.

Loans under external assistance (multilateral and bilateral debt) declined by around $0.6 billion during 2012-13 compared with an increase of $3.2 billion in the preceding year.

Government (sovereign) external debt stood at $81.7 billion as of end-March 2013 as against $81.9 billion as of end-March 2012. The shares of government and non-government external debt in the total external debt stood at 20.9 per cent and 79.1 per cent, respectively, as of end-March 2013.