India's external debt stock stood at US$155.0 billion as on March 31, 2007 accounting for 16.4 per cent of Gross Domestic Product (GDP).  The debt accumulation of US$ 28.5 billion during the year represents an increase of 22.6 per cent.  Almost 10 per cent of the addition in total external debt during the year was ascribed to a valuation change as a result of the weakening US dollar vis-à-vis other major international currencies. This has been stated in 'India's External Debt : A Status Report' released, here today by the  Department of Economic Affairs, Ministry of Finance.

In terms of rupees, India's external debt at end-March 2007 stood at Rs. 675,857 crore.  Component-wise, as much as 56 per cent of the increase was accounted for by commercial borrowings, followed by Non-Resident Indian (NRI) deposits (16 per cent), short-term debt (12 per cent) and multilateral debt (11 per cent).  Sovereign debt at US $48.6 billion at end-March 2007 accounted for around 31.4 per cent of total external debt stock and 5.3 per cent in relation to GDP.

While the total external debt stock rose during the year, the movement in critical external debt indicators showed a mixed trend.  Debt service ratio showed a perceptible improvement, declining from 9.9 per cent during 2005-06 to 4.8 per cent during 2006-07.  Besides, the foreign exchange reserves accounted for a cover of as much as 129 per cent to total external debt stock.  However, other indicators, such as debt to GDP ratio rose, though marginally, to 16.4 per cent, short-term debt to GDP ratio to 1.3 per cent, short-term debt to total debt to 7.7 per cent, and short-term debt to foreign exchange assets to 6.2 per cent.

According to the latest Global Development Finance, 2007 of the World Bank, which contains data for 2005, the ratio of external debt to Gross National Income was the second lowest for India after that for China.  The concessional loan component in India's debt portfolio was the highest amongst the top ten indebted developing countries.  Likewise, the ratio of short-term debt to foreign exchange reserves was the lowest for India and the share of short-term debt in total debt was the second lowest. India accumulated the least amount of external debt between 1990 and 2005.

The present volume of the Status Report, the thirteenth in the series, presents developments in India's external debt during 2006-07 and provides the picture of the country's external debt position since 1990. Besides containing an analysis and presentation of India's external debt, the Report also carries an international comparison of India's external debt position vis-à-vis other indebted developing countries. The complete Report is available on the website of Ministry of Finance - www.finmin.nic.in. India accumulated the least amount of external debt between 1990 and 2005.

The present volume of the Status Report, the thirteenth in the series, presents developments in India's external debt during 2006-07 and provides the picture of the country's external debt position since 1990. Besides containing an analysis and presentation of India's external debt, the Report also carries an international comparison of India's external debt position vis-à-vis other indebted developing countries. The complete Report is available on the website of Ministry of Finance - www.finmin.nic.in.

External debt stock rise driven by commercial borrowings despite improved debt service ratio and strong reserve coverage. India's external debt stock was US$155.0 billion at end March 2007, driven mainly by commercial borrowings, NRI deposits, short term and multilateral debt, with valuation effects contributing. Sovereign debt comprised about one third of the stock. Debt service ratio improved while debt to GDP and short term debt ratios rose slightly. Foreign exchange reserves covered total external debt by a substantial margin. The Status Report provides analysis, time series since 1990 and international comparisons and is available from the Ministry of Finance.