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India's external debt rose to $614.9 billion at end of Dec. 2021

Commercial borrowings remained the largest component of external debt

March 31, 2022 07:54 pm | Updated 07:54 pm IST - New Delhi

India's external debt rose by $11.5 billion to $614.9 billion in the three months ended December 2021, the Finance Ministry said on Thursday.

The external debt to GDP ratio fell marginally to 20% at the end of December last year from 20.3% at the end of September 2021.

According to India's Quarterly External Debt Report for quarter ended December 2021, the country's external debt was placed at $614.9 billion, recording an increase of $11.5 billion over its level at the end of September 2021.

"India's external debt continues to be sustainable and prudently managed," it said.

Valuation gain due to the appreciation of the U.S. dollar vis-a-vis major currencies such as Euro, Yen and Special Drawing Rights (SDRs) was placed at $1.7 billion.

"Excluding the valuation effect, the increase in external debt would have been $13.2 billion instead of an increase of $11.5 billion at end-December 2021 over end- September 2021," it said.

Commercial borrowings remained the largest component of external debt, with a share of 36.8%, followed by non-resident deposits (23.1%) and short-term trade credit.

At the end of December 2021, long-term debt, with original maturity of above one year, was placed at $500.3 billion, recording an increase of $1.7 billion over its level at the end of September 2021.

The share of short-term debt, with original maturity of up to one year, in total external debt increased to 18.6% at the end of December 2021 from 17.4% at end-September 2021.

U.S. dollar denominated debt remained the largest component of India's external debt, with a share of 52% at end-December 2021, followed by the Indian rupee (32%), SDR (6.7%), Yen (5.3%), and the Euro (3.1%).

"The borrower-wise classification shows that the outstanding external debt of government marginally declined while that of non-government sector increased as at end-December 2021 over the previous quarter," the report said.

Also, debt service (principal repayments plus interest payments) increased to 4.9% of current receipts at end-December 2021 from 4.7% at end-September 2021.

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