India sees 12.9% rise in external debt in FY13

According to a government data, India’s external debt rose 12.9 per cent to $390 billion as at end March 2013 from the previous year.

Of the total external debt, external commercial borrowings (ECB) by Indian companies contributed almost a third. Deposits from Non-Resident Indians (NRIs) constituted 18.2 per cent of the external debt. Worryingly, short-term debt constituted about a fourth of the countryÂ’s external debt.

The remarkable element is that over the past five years, the short-term debt has been continuously rising. It was 19.3 per cent of the total debt in 2009 and has risen to 24.8 per cent in 2013. The immediate risk of this high external debt is the pressure on the rupee.

The long term debt – which includes external commercial borrowings, borrowings from multilateral and bilateral agencies, among other things – forms 75.2 per cent of the total external debt.

Consequently, over the years, the long-term debt component has shown a declining trend, from 80.7 per cent in 2009 to 75.2 per cent in 2013.

Between 2004 and 2013, IndiaÂ’s external debt rose 3.4 times, or $277.4 billion.The debt denominated in US dollar continued to form a lionÂ’s share of the total debt at 57.2 per cent. This was followed by Indian rupee at 24 per cent, Special Drawing Rights at 7 per cent, Japanese yen at 6.3 per cent and euro at 3.5 per cent.