NEW DELHI: India’s external debt till March 2020, rose to $558.5 billion, up by 2.8 per cent on a year-on-year basis, while its current account surplus has gone up by $0.6 billion, data released by the RBI showed. “At end-March 2020, India’s external debt was placed at $558.5 billion, recording an increase of $15.4 billion over its level at end-March 2019,” it said.
Commercial borrowings remained the largest component of the external debt, with a share of 39.4 per cent, followed by non-resident deposits at 23.4 per cent and short-term trade credit at 18.2 per cent. Long-term debt, with original maturity of above one year, was placed at $451.7 billion, a rise of $17 billion as compared to March 2019.
Short-term debt on residual maturity basis constituted 42.4 per cent of total external debt and 49.5 per cent of foreign exchange reserve at the end of March.
“Valuation gains due to the appreciation of the US dollar vis-a-vis Indian rupee and other major currencies were placed at $16.6 billion. Excluding the valuation effect, the increase in external debt would have been $32 billion instead of $15.4 billion at end-March 2020 over end-March 2019,” the central bank added.
Besides, the quarterly current account, which measures the difference between the value of a country’s
imports and exports, has recorded a marginal surplus since the January-March quarter of 2007.
It had recorded a deficit of $4.6 billion or 0.7 per cent of GDP in the year-ago period. Lower trade deficit was one of the prime reasons for the improvement in the current account balances both for the March quarter as well as for the whole fiscal year. For FY20, the current account deficit narrowed to 0.9 per cent of the GDP compared to 2.1 per cent in FY19.Meanwhile, India’s forex reserves also increased by
$ 59.5 billion during 2019-20.
Lower trade deficit
A lower trade deficit ($35 billion) and a sharp rise in net invisible receipts ($35.6 billion) as compared with the year-ago period has led to a surplus in India’s current account balance.