India’s External Debt Reaches $629.1 Billion, Debt-GDP Ratio Declines to 18.6%

India's External Debt Reaches $629.1 Billion, Debt-GDP Ratio Declines to 18.6%

Asif Iqbal | September 28, 2023 | 10:45 PM IST | Breaking News, India | Follow on Google News

India’s External Debt Reaches $629.1 Billion, Debt-GDP Ratio Declines to 18.6%

The Reserve Bank of India (RBI) has released India’s external debt data, revealing that it reached USD 629.1 billion by the end of June 2023. This marks a marginal increase from USD 624.3 billion at the end of March 2023. However, the debt-GDP ratio decreased to 18.6% during the same period.

Key Highlights:

1. Debt-GDP Ratio Declines:

The external debt to GDP ratio decreased from 18.8% at the end of March 2023 to 18.6% at the end of June 2023.

2. Valuation Effect:The appreciation of the US dollar against major currencies like the yen and SDR2 resulted in a valuation effect of USD 3.1 billion. Excluding this effect, external debt would have increased by USD 7.8 billion instead of USD 4.7 billion at the end of June 2023 compared to the end of March 2023.

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3. USD-Denominated Debt: The largest component of India’s external debt remains debt denominated in US dollars, accounting for 54.4% at the end of June 2023. Debt denominated in Indian rupees constituted 30.4%, followed by SDR (5.9%), yen (5.7%), and the euro (3.0%).

4. Long-Term Debt:Long-term debt, with an original maturity of over one year, stood at USD 505.5 billion at the end of June 2023, marking an increase of USD 9.6 billion compared to the end of March 2023.

5. Short-Term Debt:The share of short-term debt, with an original maturity of up to one year, in total external debt declined to 19.6% at the end of June 2023 from 20.6% at the end of March 2023. The ratio of short-term debt to foreign exchange reserves also decreased to 20.8% at the end of June 2023 (from 22.2% at the end of March 2023).

6. Debt of General Government: The outstanding debt of the general government decreased, while non-government debt increased at the end of June 2023.

7. Components of External Debt: Loans remained the largest component of external debt, comprising 32.9% of the total, followed by currency and deposits (22.9%), trade credit and advances (19.0%), and debt securities (16.8%).India’s management of its external debt, its composition, and the debt-GDP ratio are essential factors in understanding the country’s economic stability and financial health. These figures provide valuable insights into India’s fiscal situation and its ability to manage its external financial obligations.

Asif Iqbal

Asif Iqbal is a seasoned news writer with a passion for delivering the latest updates to the public. Currently serving as the senior writer at VoM News, a prominent news outlet known for its comprehensive coverage of diverse topics, Asif has established himself as a reliable source of information. With a keen eye for detail and a knack for storytelling, he consistently provides readers with well-crafted articles that cover a wide range of news categories. His dedication to journalistic integrity and his commitment to staying ahead of the news curve make him an invaluable asset to Vom News, ensuring that readers are always well-informed on the issues that matter most. You can find his work and stay updated on current events by visiting vomnews.in.