INDIA’S EXTERNAL DEBT FOR THE QUARTER ENDED DECEMBER 2005
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As at the end of December 2005, India’s external debt stock at US$119.2 billion showed a decline of US$5.0 billion as compared to US$124.2 billion at end-September 2005 (Table). The contraction in external debt outstanding at end-December 2005 was essentially brought about by a drop in external commercial borrowings reflecting redemption of India Millennium Deposits (IMDs) of US$5.5 billion in December 2005.
| Table : India’s External Debt (US $ million) |
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| Item | Debt Outstanding | Variation | |||||
| Absolute | Percent | ||||||
| March 2005 R | Sept. 2005 R | December 2005 QE | Mar. 05 to Dec. 05 (4-2) | Sept. 05 to Dec. 2005 (4-3) | Mar. 05 to Dec. 05 | Sept. 05 to Dec. 05 | |
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| 1. Multilateral | 31,702 | 31,429 | 31,799 | 97 | 370 | 0.3 | 1.2 |
| 2. Bilateral | 16,930 | 15,875 | 15,553 | -1,377 | -322 | -8.1 | -2 |
| 3. IMF | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 4. Export credit | 4,980 | 5,150 | 5,168 | 188 | 18 | 3.8 | 0.3 |
| 5. Commercial borrowings | 27,024 | 28,319 | 22,433 | -4,591 | -5,886 | -17 | -20.8 |
| 6. NRI Deposits (long-term) | 32,743 | 32,861 | 33,239 | 496 | 378 | 1.5 | 1.2 |
| 7. Rupee debt | 2,301 | 2,120 | 2,069 | -232 | -51 | -10.1 | -2.4 |
| 8. Long-term debt (1 to 7) | 115,680 | 115,754 | 110,261 | -5,419 | -5,493 | -4.7 | -4.7 |
| 9. Short-term debt | 7,524 | 8,398 | 8,931 | 1,407 | 533 | 18.7 | 6.3 |
| 10. Total debt (8+9) | 123,204 | 124,152 | 119,192 | -4,012 | -4,960 | -3.3 | -4 |
| R: Revised QE: Quick Estimates | |||||||
Component-wise, long-term debt outstanding at US$110.3 billion at end-December 2005 showed a fall of US$5.49 billion over the quarter due to lower stock of commercial borrowings mainly reflecting repayment of IMDs. Short-term debt increased by 6.3 percent over the quarter to US$8,931 million on account of a rise in trade credits. Increase in trade credits was attributed to larger import growth during the current fiscal year so far.
As regards their share in total debt stock, Non-Resident deposits accounted for 27.9 percent of the total debt at end-December 2005. Multilateral debt constituted 26.7 per cent followed by commercial borrowings at 18.8 per cent. The share of bilateral debt was 13.0 per cent. Export credit and Rupee debt accounted for 4.3 percent and 1.7 per cent, respectively. The share of short-term debt was 7.5 per cent.
India’s foreign currency reserves including foreign currency assets of the RBI, gold, SDRs and Reserve Tranche Position in the International Monetary Fund stood at US$137.2 billion as at the end of December 2005. Foreign currency assets of the RBI were of the order of US$131.0 billion as on December 31, 2005 providing a cover of around 110 per cent to total external debt stock.
US dollar continues to be the major currency of denomination in India’s external debt portfolio. The share of US dollar in the debt stock of the country has, however, declined from 54.3 per cent at end-March 2002 to 44.6 per cent at end-December 2005.
The external debt management policy of the Government continues to be one of caution, focusing on raising loans from least expensive sources preferably with longer maturity profiles, accelerating growth of exports, monitoring of short-term debt, keeping commercial debt under manageable limits and encouraging non-debt creating capital flows.
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