According to data released by the Reserve Bank of India (RBI) on Thursday, India’s external debt increased slightly to USD 629.1 billion at the end of June 2023, compared to USD 624.3 billion at the end of March 2023. Despite the marginal rise in debt, the debt-to-GDP ratio decreased, with RBI stating that it declined from 18.8 percent at the end of March 2023 to 18.6 percent at the end of June 2023.

A significant portion of India’s external debt was denominated in US dollars, comprising 54.4 percent, followed by debt in Indian rupees (30.4 percent), Special Drawing Rights (SDR) (5.9 percent), yen (5.7 percent), and the euro (3.0 percent). The valuation effect, driven by the US dollar’s appreciation against major currencies like the yen and SDR, accounted for USD 3.1 billion.

Excluding the valuation effect, the external debt would have seen an increase of USD 7.8 billion at the end of June 2023 compared to the end of March 2023, as per the central bank.

The data also revealed that long-term debt, with an original maturity period exceeding one year, amounted to USD 505.5 billion at the end of June 2023, marking an increase of USD 9.6 billion compared to the previous quarter. Meanwhile, the share of short-term debt, with an original maturity period of up to one year, declined from 20.6 percent at the end of March 2023 to 19.6 percent at the end of June 2023.

RBI noted that while the outstanding debt of the general government decreased, non-government debt increased at the end of June 2023. Non-financial corporations held the highest share of outstanding debt in total external debt at 39.8 percent, followed by deposit-taking corporations (excluding the central bank) at 26.6 percent, the general government at 21.1 percent, and other financial corporations at 7.6 percent.

Additionally, loans remained the most significant component of external debt, accounting for 32.9 percent, followed by currency and deposits, trade credit and advances, and debt securities.