India’s external debt grew by 7.6 percent to $440.6 billion in the financial year 14 primarily on the back of rise in non-resident deposits. External debt comprises items such as external commercial borrowings, NRI deposits, short-term debt as well as multilateral and bilateral debt. The share of external commercial borrowings (ECBs) continued to be the highest at 33.3 percent ($146.5 billion) followed by NRI deposits at 23.6 percent ($103.8 billion) and short term debt at 20.3 percent ($89.2 billion).
During FY14, NRI deposits rose $33 billion to $103.8 billion mainly driven by special swap scheme introduced by the RBI for commercial banks during September to November 2013 to mobilize FCNR (B) deposits. However, the share of short-term debt total external debt declined 20.3 percent as of March 2014 as compared to 23.6 percent as of March 2013. Further, the ratio of short-term debt to foreign exchange reserves declined to 29.3 percent as of March 2014 from 33.1 per cent as of March 2013. The government or sovereign external debt stood at $81.5 billion as at end-March 2014 as against $81.7 billion as at end-March 2013.
The valuation gain during the reported fiscal amounted to $ 9.4 billion on account of appreciation of the US dollar against the Indian rupee and other major currencies. US dollar denominated debt continued to be the largest component of India's external debt with a share of 61.8 percent as at end-March 2014, followed by Indian rupee (21.1 percent), SDR (6.9 percent), Japanese Yen (5.1 percent) and Euro (3.4 percent).