External debt of India rose approximately by 13 per cent to $390 billion in 2012-13 as against $345.5 billion at end-March 2012. The increase in debt amount is due to rise in short-term trade credit and external commercial borrowings (ECBs) in the back of high current account deficit, the Reserve Bank of India (RBI) said today.
In a release RBI said, “The high current account deficit witnessed during 2012-13 and its financing increasingly through debt flows particularly by trade credit resulted in significant rise in India’s external debt during 2012-13.”
“However, magnitude of increase in external debt was offset to some extent due to valuation change (gain) resulting from appreciation of US dollar against Indian rupee and other international currencies,” the RBI further added.
There has been sizeable rise in ECBs and rupee denominated non-resident Indian (NRI) deposits as well, it said.
RBI further maintained that excluding the valuation change due to the movement of US dollar against major international currencies and rupee, the external debt as at end-March 2013 would have increased by $55.8 billion. However, the actual increase was lower at $44.6 billion.
As per the data, share of ECBs ($120.9 billion) continued to be highest at 31 per cent of the total debt, followed by short term debt (24.8 per cent) and NRI deposits (18.2 per cent).
Source – PTI