India’s external debt stock dropped 2.7 per cent, or $13.1 billion, to $471.9 billion at the end of March from a year ago, recording the first such drop in at least five years, the finance ministry said on Friday. The decline was due to a fall in long-term debt, particularly NRI deposits and commercial borrowings.
Long-term external debt recorded a 4.4 per cent decline to $383.9 billion as of March. Such long-term debt made up for 81.4 per cent of total external debt at end-March 2017. Short-term external debt rose 5.5 per cent to $88 billion by the end of March, thanks to rise in trade related credits — a major component of short-term debt, the ministry said. Government (sovereign) external debt rose to $95.8 billion at end-March.
“India’s external debt has remained within manageable limits and the external debt situation has improved in FY17 over FY16 as indicated by the increase in forex reserves cover to debt to 78.4 per cent from 74.3 per cent, and fall in the external debt-GDP ratio to 20.2 per cent from 23.5 per cent,” the ministry said.