India's external debt rises marginally to 23.8% of GDP

NEW DELHI: India's external debt rose marginally to 23.8% of GDP at the end of March 2015 compared with 23.6% of GDP a year ago, largely on account of increase in external commercial borrowings (ECBs) and NRI deposits.

In absolute terms, external debt was placed at $475.8 billion at the end of March 2015, $ 29.5 billion or 6.6% rise from a year ago. "The rise in external debt was due to the increase in long-term debt particularly commercial borrowings and NRI deposits," finance ministry said. The share of long-term debt, a key measure of debt sustainability, improved to 82.2% of total from 79.5% a year ago.

"A cross country comparison based on 'International Debt Statistics 2015' of the World Bank which presents the debt data for 2013, shows that India continues to be among the less vulnerable countries with its external debt indicators comparing well with other indebted developing countries," the statement said. "India's key debt indicators, especially debt to GNI and debt service ratios continue to be comfortable."

The short-term external debt was placed at $ 84.7 billion at the end of March 2015, a decline of 7.6% from $91.7 billion at the end of March 2014. The shares of government (sovereign) debt in the total external debt was 18.9%.

ECB of companies are the biggest component in India's external debt. "The rise in commercial borrowings was due to spike in commercial bank loans and securitised borrowing. ECB has always been occupying the highest share in India's external debt over the years. By end-March 2015, ECB has the highest share of 38.2% in India's external debt," it added.