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External debt of India: Difference between revisions
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The '''[[external debt]] of India''' is the total debt the country owes to foreign creditors. The debtors can be the [[Government of India|Union government]], [[State governments of India|state governments]], corporations or citizens of India. The debt includes money owed to private [[commercial bank]]s, foreign governments, or [[global financial system|international financial institutions]] such as the [[International Monetary Fund]] (IMF) and [[World Bank]]. | The '''[[external debt]] of India''' is the total debt the country owes to foreign creditors. The debtors can be the [[Government of India|Union government]], [[State governments of India|state governments]], corporations or citizens of India. The debt includes money owed to private [[commercial bank]]s, foreign governments, or [[global financial system|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 (India)|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. | 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 (India)|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. | ||
India’s external debt was US$ | India’s external debt was US$570 billion at the end of March 2021. It recorded an increase of US$11.6 billion over its level at end of March 2020. The external debt to GDP ratio increased to 21.1% at end of March 2021 from 20.6% an year ago.<ref name="Mar2021">{{cite web|author1=RBI |title=India's External Debt as at the end of March 2021|url=https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=51819}}</ref> | ||
The foreign currency reserves increased to over US $ | The foreign currency reserves increased to over US $579 billion at the end of March 2021 compared to over US $474 billion at the end of March 2020. Hence the foreign currency reserves as a ratio to external debt improved to 101.1% at end of March 2021 from 84.9% at end of March 2020.<ref>https://m.rbi.org.in//scripts/WSSViewDetail.aspx?PARAM1=2&TYPE=Section</ref> | ||
==Long-term debt== | ==Long-term debt== | ||
The composition pattern of India's external debt is noted below. Long-term borrowings (more than a year to maturity) dominate India's external debt. India classifies its long-term external debt into seven heads. The external debt column notes the value of external debt stock outstanding at the end of | The composition pattern of India's external debt is noted below. Long-term borrowings (more than a year to maturity) dominate India's external debt. India classifies its long-term external debt into seven heads. The external debt column notes the value of external debt stock outstanding at the end of March 2021.<ref name="Mar2021" /> | ||
{| class="wikitable" | {| class="wikitable sortable" | ||
|+ | |+ | ||
!S. No.! | !scope="col" class="unsortable"|S. No. | ||
!scope="col" |Component of Long-term debt | |||
!scope="col" |Debt (US$ billion) March 2020 | |||
!scope="col" |Debt (US$ billion) March 2021 | |||
!scope="col" |Percentage share March 2021 | |||
|- | |- | ||
|1||Multilateral||style="text-align:right;"| | |1||Multilateral||style="text-align:right;"|59.9|| style="text-align:right;" |69.7|| style="text-align:right;" |12.23% | ||
|- | |- | ||
|2||Bilateral||style="text-align:right;"| | |2||Bilateral||style="text-align:right;"|28.1|| style="text-align:right;" |31.0|| style="text-align:right;" |5.44% | ||
|- | |- | ||
|3||[[IMF]] loans||style="text-align:right;"|5. | |3||[[IMF]] loans||style="text-align:right;"|5.4||style="text-align:right;"|5.6||style="text-align:right;"|0.98% | ||
|- | |- | ||
|4||Export credit||style="text-align:right;"| | |4||Export credit||style="text-align:right;"|7.0||style="text-align:right;"|6.5||style="text-align:right;"|1.14% | ||
|- | |- | ||
|5||Commercial borrowings||style="text-align:right;"| | |5||Commercial borrowings||style="text-align:right;"|219.5|| style="text-align:right;" |213.2|| style="text-align:right;" |37.40% | ||
|- | |- | ||
|6||[[Non-resident Indian and person of Indian origin|NRI]] deposits||style="text-align:right;"| | |6||[[Non-resident Indian and person of Indian origin|NRI]] deposits||style="text-align:right;"|130.6|| style="text-align:right;" |141.9|| style="text-align:right;" |24.89% | ||
|- | |- | ||
|7||[[Indian rupee|Rupee]] debt||style="text-align:right;"|1. | |7||[[Indian rupee|Rupee]] debt||style="text-align:right;"|1.0||style="text-align:right;"|1.0||style="text-align:right;"|0.18% | ||
|- | |- | ||
| ||''Total Long-term debt''||style="text-align:right;"|''' | | ||''Total Long-term debt''||style="text-align:right;"|'''451.6'''||style="text-align:right;"|'''468.9 '''||style="text-align:right;"|'''82.26%''' | ||
|- | |- | ||
| ||''Total [[Short-term debt]]''||style="text-align:right;"|''106. | | ||''Total [[Short-term debt]]''||style="text-align:right;"|''106.9''||style="text-align:right;"|''101.1''||style="text-align:right;"|''17.74%'' | ||
|- | |- | ||
| ||'''Total External Debt'''||style="text-align:right;"|''' | | ||'''Total External Debt'''||style="text-align:right;"|'''558.4'''||style="text-align:right;"|'''570.0'''||style="text-align:right;"|'''100%''' | ||
|} | |} | ||
===Multilateral=== | ===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 | 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 March 2021, India had a total multilateral debt of $69.7 billion. 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. | ||
===Bilateral=== | ===Bilateral=== | ||
Bilateral debt is the money India owes to foreign governments. As on 31 | Bilateral debt is the money India owes to foreign governments. As on 31 March 2021, India had a total bilateral debt of $31.0 billion. | ||
==Currency composition== | ==Currency composition== | ||
India's external debt is held in multiple currencies, the largest of which is the [[United States dollar]]. As on 31 March 2020, 53.7% of the country's debt was held in U.S. dollars. The rest of the debt is held in [[Indian rupees]] (31.9%), [[Japanese yen]] (5.6%), [[special drawing rights]] (4.5%), [[Euros]] (3.5%) and other currencies (0.8%).<ref name="Mar2020">{{cite web|author1=Department of Economic Affairs|title= | India's external debt is held in multiple currencies, the largest of which is the [[United States dollar]]. As on 31 March 2020, 53.7% of the country's debt was held in U.S. dollars. The rest of the debt is held in [[Indian rupees]] (31.9%), [[Japanese yen]] (5.6%), [[special drawing rights]] (4.5%), [[Euros]] (3.5%) and other currencies (0.8%).<ref name="Mar2020">{{cite web|author1=Department of Economic Affairs|title=India's External Debt- A Status Report 2019-20|url=https://dea.gov.in/sites/default/files/India%27s%20External%20Debt%20-%20A%20Status%20Report%202019-20.pdf|website=Ministry of Finance|access-date=2 April 2021|date=March 2020}}</ref> | ||
==Concerns and issues== | ==Concerns and issues== | ||
[[Moody’s]] Investors Service 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."<ref>{{cite web|title= | [[Moody’s]] Investors Service 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."<ref>{{cite web|title=Moody's upgrades India's government bond rating to Baa2 from Baa3; changes outlook to stable from positive|url=https://www.moodys.com/research/Moody's-upgrades-Indias-government-bond-rating-to-Baa2-from-Baa3--PR_374998|website=Moody's.com|access-date=12 April 2018|date=16 November 2017}}</ref> | ||
==References== | ==References== | ||