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India's external debt rises to $485 billion at March-end

20 Sep 2016 Evaluate

India's total external debt rose marginally by 2.2 percent to $485 billion at the end of March 2016, compared to that of $475 billion as of March 31, 2015, largely driven by private commercial borrowings and non-resident Indian (NRI) deposits, finance ministry said in its external debt report.

As per the 22nd issue of the Annual Publication titled India's External Debt: A Status Report 2015-16 of the Finance Ministry and prepared by the Department of Economic Affairs, long-term external debt, which accounted for 82.8% of total external debt in March, was at $ 402.2 billion, showing an increase of 3.3% over the year-ago period, due to the rise in long-term debt, particularly NRI deposits. On the other hand the Short-term external debt decreased by 2.5% to $83.4 billion at March-end 2016 as compared to $ 84.7 billion at March-end 2015. This was mainly due to the decline in trade-related credits. Share of commercial borrowings at end of March 2016 declined to 17.2% of total external debt, from 18 % a year ago.

The report said that forex reserves covered 74.2% of the external debt at the end of March 2016, higher than 68.2% at the end of March 2014, showing an improvement in this debt sustainability measure. Concessional debt was pegged at 9% of the total debt, up from 8.8% at the end of the year before. It added that India's external debt has remained within manageable limits in 2015-16 as indicated by increase in foreign exchange reserves to debt ratio to 74.2 percent, the external debt-GDP ratio of 23.7 percent, and a fall in short-term debt to 17.2 percent.

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