Despite the rise, the country’s external debt to GDP ratio declined to 18.7 per cent at end-March 2024 from 19 per cent at the end of March 2023. The ratio comprises both government and non-government debt. As per the data provided by the central bank, the government’s external debt stood at 4.2 per cent of GDP while the non-government sector’s external debt was placed at 14.5 per cent.
“US dollar-denominated debt remained the largest component of India’s external debt, with a share of 53.8 per cent at end-March 2024, followed by debt denominated in the Indian rupee (31.5 per cent), yen (5.8 per cent), SDR (5.4 per cent), and euro (2.8 per cent),” said country’s central bank in the statement.
Additionally, loans remained the largest component of external debt, with a share of 33.4 per cent, followed by currency and deposits at 23.3 per cent), trade credit and advances at 17.9 per cent) and debt securities at 17.3 per cent.
For the said period, long-term debt (with original maturity of above one year) was placed at $ 541.2 billion, recording an increase of US$ 45.6 billion from a year before. However, on the other hand, the share of short-term debt (with original maturity of up to one year) in total external debt declined to 18.5 per cent at end-March 2024 from 20.6 per cent at end-March 2023.
Similarly, the ratio of short-term debt (original maturity) to foreign exchange reserves declined to 19.0 per cent at end-March 2024 (22.2 per cent at end-March 2023). Earlier during the interim budget session, Prime Minister Narendra Modi-led government has been taking enough measures to bring down debt-to-GDP ratio, said Finance Minister Nirmala Sitharaman, which remains lower than in some of the developed countries, and indicated that concerns about India’s debt sustainability are overblown.
