India's external debt touches $306 b

At the end of March 2010, the country’s external debt was at $261 billion. Corporate overseas borrowings rose as much as 28.9 per cent and short-term borrowings increased by 21.2 per cent, RBI said. It was followed by NRI deposits which rose by 16.9 per cent at $51.6 billion while multilateral debt increased by 15.8 per cent at $48.4 billion.

The rise in NRI deposits was largely on account of increase in NRO deposits and FCNR(B) deposits and partly due to valuation effects, it said. However, the debt service ratio declined to 4.2 per cent during 2010-11 as compared to 5.5 per cent a year ago. Of the total debt, the long-term debt stood at $240.9 billion while short-term debt at $65 billion.

The RBI also said that the valuation effect reflecting the depreciation of the US dollar against other major global currencies and Indian rupee resulted in an increase in India’s external debt by $6.5 billion during 2010-11.