India's external debt rises to $335 billion

India's external debt rose to $334.9 billion at December-end 2011, an increase of 9.4 per cent in the first nine months of the current financial year, owing largely to higher commercial borrowings and short-term trade credit, the finance ministry said Friday.

Data released by the department of economic affairs showed that India's total external debt at the beginning of 2011-12 was $306.1 billion. It increased by $28.8 billion or 9.4 per cent in the first three quarters of the fiscal. The government external debt stood at $81.2 billion, or 24.3 per cent of total external debt.

The proportion of external debt to the country's gross domestic product (GDP) increased to 20 per cent at December-end 2011 as compared to 17.8 per cent at beginning of the financial year ending March 31, 2012.

The long-term debt rose to $256.9 billion at December-end 2011, recording an increase of $15.8 billion or 6.5 per cent over the March-end 2011 level.

The short-term grew by $13.1 billion 20.1 per cent to $78.1 billion during the period under review.

Short-term debt accounted for 23.3 per cent of India's total external debt, while the remaining (76.7 per cent) was long-term debt.

Component-wise, the share of commercial borrowings stood highest at 29.9 per cent, followed by Non-Resident Indian (NRI) deposits (15.7 per cent) and multilateral debt (14.9 per cent).

The ratio of short-term external debt to foreign exchange reserves was 26.3 per cent at Dec 31, 2011 as compared to 21.3 per cent at March 31, 2011.

India's foreign exchange reserves provided a cover of 99.6 per cent of the country's total external debt at the beginning of fiscal 2011-12, while it declined to 88.6 per cent by the end of the third quarter.

The share of US dollar denominated debt was the highest in external debt stock at 56.9 per cent, followed by the Indian rupee 18.6 per cent, Japanese Yen 10.4 per cent, special drawing right (SDR) 8.9 per cent and Euro 3.8 per cent.