• HDFC
• 03 Oct 2018
• Knowledge Centre

HDFC, Tester

India's external debt dips 2.8% to US$514.4 billion.

 

India's external debt declined by 2.8% to US$514.4 billion at June-end 2018 vis-à-vis the previous quarter. This was largely on account of a decrease in commercial borrowings, short-term debt, and non-resident Indian (NRI) deposits, according to the Reserve Bank of India.

 

As per RBI data, the decrease in the level of external debt was mainly due to valuation gains resulting from the strengthening of the US Dollar against the Indian Rupee and major currencies. The external-debt-to-GDP ratio stood at 20.4% at the end of June 2018. This was slightly lower than its level of 20.5% at the end of March 2018.

 

"Valuation gains due to the appreciation of the US Dollar vis-a-vis the Indian Rupee and major currencies were placed at US$13 billion. Excluding the valuation effect, the decrease in external debt would have been US$1.9 billion instead of US$14.9 billion at end-June 2018 over end-March 2018," RBI said.

 

Commercial borrowings continued to be the largest component of external debt with a share of 37.8%. This was followed by NRI deposits at 24.2% and short-term trade credit at 18.8%. Long-term debt (with original maturity of above one year) stood at US$ 415.7 billion, a decline of US$11.4 billion over its level at the end of March 2018.