External debt of India
The external debt of India is the total debt the country owes to foreign creditors. The debtors can be the Union government, state governments, corporations or citizens of India. The debt includes money owed to private commercial banks, foreign governments, or international financial institutions such as the International Monetary Fund (IMF) and World Bank.
India's external debt data is published quarterly, with a lag of one quarter. Statistics for the first two quarters of the calendar year are compiled and published by the Reserve Bank of India. Data for the last two quarters is compiled and published by the Ministry of Finance. The Government of India also publishes an annual status report on the debt which contains detailed statistical analysis of the country's external debt position.[1]
As on 31 December 2019, India's external debt stock totaled US$563.9 billion, a quarter-over-quarter increase of 1.2%.[2]
Long-term debt
The composition pattern of India's external debt is noted below. Long-term borrowings (more than a year to maturity) dominate India's external debt. India classifies its long-term external debt into seven heads. The external debt column notes the value of external debt stock outstanding at the end of December 2019.[1]
| S. No. | Component | External debt (US$) | Percentage share |
|---|---|---|---|
| 1 | Multilateral | 60,224 million | 10.06% |
| 2 | Bilateral | 26,332 million | 4.6% |
| 3 | IMF loans | 5,501 million | 0.97% |
| 4 | Export credit | 7,048 million | 1.24% |
| 5 | Commercial borrowings | 223,825 million | 39.7% |
| 6 | NRI deposits | 133,138 million | 23.6% |
| 7 | Rupee debt | 1,079 million | 1.91% |
| Long-term debt | 457,186 million | 81.0% | |
| Short-term debt | 106,780 million | 18.9% | |
| Total | 563.9 billion | 100% | |
Multilateral
Multilateral debt is the money India owes to international financial institutions such as the Asian Development Bank (ADB), the International Development Association (IDA), the International Bank for Reconstruction and Development (IBRD), the International Fund for Agricultural Development (IFAD) and others. Borrowing from the International Monetary Fund (IMF) are not included under multilateral debt, and are instead classified separately under the IMF head. As on 31 December 2019, India had a total multilateral debt of $60,224 million. The country's major creditors are the IDA, ADB, and IBRD. The IFAD and a few other multilateral creditors hold the remaining portion of the multilateral debt.[1]
Bilateral
Bilateral debt is the money India owes to foreign governments. As on 31 December 2019, India had a total bilateral debt of $26.332 billion. About 79.7% of the total bilateral debt is owed to Japan. Germany (10.9%), Russia (5.3%), France (3.3%), and the United States (0.7%) are other major creditors of India. The remaining 0.1% is owed to various other governments.[1]
Currency composition
India's external debt is held in multiple currencies, the largest of which is the United States dollar. As on 31 December 2017, 48.2% of the country's debt was held in U.S. dollars. The rest of the debt is held in Indian rupees (37.3%), special drawing rights (5.7%), Japanese yen (4.6%), Euros (3.2%) and other currencies (1%).[3]
Concerns and issues
Moody's upgraded India's government bond rating from Baa3 to Baa2 on 16 November 2017. In the announcement, Moody’s noted that "greater expectation of a sizeable and sustained reduction in the general government debt burden, through increased government revenues combined with a reduction in expenditures, would put positive pressure on the rating."[4]
References
- Department of Economic Affairs. "INDIA'S EXTERNAL DEBT AS AT END-DECEMBER 2019".
- {{cite web |title=India’s External Debt as at the end of December 2019 |url=https://dea.gov.in/external-debt}
- Department of Economic Affairs (March 2018). "INDIA'S EXTERNAL DEBT AS AT END-DECEMBER 2017" (PDF). Ministry of Finance. Retrieved 12 April 2018.
- "Moody's upgrades India's government bond rating to Baa2 from Baa3; changes outlook to stable from positive". Moody's.com. 16 November 2017. Retrieved 12 April 2018.
