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External Debt

External Debt:

India’s external debt rose to $620.7 billion at end-March 2022, recording an increase of $47.1 billion over the year earlier period, Reserve Bank of India (RBI) data showed.

  • The external debt to GDP ratio declined to 19.9% at end-March 2022, from 21.2% a year earlier.
  • Valuation gains on account of the appreciation of the U.S. dollar vis-à-vis the Indian rupee and major currencies including the Japanese yen and euro was estimated at $11.7 billion.
  • Excluding the valuation effect, external debt would have increased by $58.8 billion instead of $47.1 billion at end-March 2022 over end-March 2021, the RBI said.
  • India’s long-term debt (with original maturity of above one year) rose to $499.1 billion, recording an increase of $26.5 billion over its level at end-March 2021, RBI data showed.
  • During the same period, the share of short-term debt in total external debt increased to 19.6% from 17.6%.
  • Similarly, the ratio of short-term debt to foreign exchange reserves increased to 20%. U.S. dollar-denominated debt remained the largest component of external debt, with a share of 53.2%.
  • Separately, the RBI said net claims of non-residents on India increased by $5.6 billion during the fourth quarter of 2021-22 to $359.8 billion in March 2022.