India’s external debt rose by $11.5 billion to $614.9 billion in the three months ended December 2021, the Treasury said on Thursday.
The external debt-to-GDP ratio fell slightly from 20.3% at the end of September 2021 to 20% at the end of December last year.
According to India’s Quarterly External Debt Report for the quarter ended December 2021, the country’s external debt was valued at US$614.9 billion, an increase of US$11.5 billion from the level at the end of September 2021.
“India’s external debt remains sustainable and is being prudently managed,” it said.
The valuation gain due to the appreciation of the US dollar against major currencies such as the euro, yen and special drawing rights (SDRs) was estimated at US$1.7 billion.
“Excluding the valuation effect, the increase in external debt at the end of December 2021 compared to the end of September 2021 would have been $13.2 billion instead of $11.5 billion,” it said.
Commercial credit remained the largest component of external debt, accounting for 36.8%, followed by non-resident deposits (23.1%) and short-term trade credit.
At the end of December 2021, long-term debt with an original maturity of over one year was placed at US$500.3 billion, an increase of US$1.7 billion from the position at the end of September 2021.
The share of short-term debt with an original maturity of up to one year in total external debt increased from 17.4% at the end of September 2021 to 18.6% at the end of December 2021.
US dollar-denominated debt remained the largest component of India’s external debt, accounting for 52% at the end of December 2021, followed by the Indian rupee (32%), SDR (6.7%), yen (5.3%) and the yen euros (3.1%).
“Borrower classification shows that government’s outstanding external debt decreased marginally, while that of the non-government sector increased quarter-on-quarter through the end of December 2021,” the report said.
Debt service (principal repayments plus interest payments) also increased to 4.9% of current income at the end of December 2021 from 4.7% at the end of September 2021.
