<p>India's external debt rose modestly by 2.1 per cent year-on-year to $570 billion as of March-end 2021, notwithstanding the Covid-19 pandemic, according to the finance ministry.</p>.<p>External debt to GDP ratio rose marginally to 21.1 per cent from 20.6 per cent as of end-March 2020.</p>.<p>Reserves to external debt ratio, however, increased to 101.2 per cent from 85.6 per cent during the same period, thereby consolidating the country's position as a net creditor to the world, as per the status report on India's external debt released by the ministry.</p>.<p>The sovereign debt at $107.2 billion rose higher by 6.2 per cent over its level a year ago, mainly because of an increase in external assistance more than compensating the fall in FPI investment in government securities (G-Secs), it said.</p>.<p>The augmented external assistance reflected larger disbursement of Covid-19 loans from multilateral agencies during 2020-21.</p>.<p>The non-sovereign debt, on the other hand, grew 1.2 per cent on a yearly basis to $462.8 billion.</p>.<p>Commercial borrowings, NRI deposits and short-term trade credit account for 95 per cent of the non-sovereign debt.</p>.<p>While NRI deposits grew 8.7 per cent to $141.9 billion, commercial borrowings at $197.0 billion and short-term trade credit at $97.3 billion shrank by 0.4 per cent and 4.1 per cent, respectively.</p>.<p>At March-end 2021, long-term debt (with original maturity of above one year) was at $468.9 billion, recording an increase of $17.3 billion over the year-ago level.</p>.<p>US dollar-denominated debt remained the largest component of India's external debt, with a share of 52.1 per cent as of March-end 2021, followed by Indian rupee (33.3 per cent), yen (5.8 per cent), SDR (4.4 per cent) and the euro (3.5 per cent).</p>.<p>"Over the years, policy on external debt has enabled the private sector to access foreign debt in a calibrated manner. As at end-March 2021, the level of non-sovereign debt was more than four times that of sovereign debt, compared to half as at end-March 1991," it said.</p>.<p>Given its relative size, typically in a normal year, it is the relative rise in non-sovereign debt that influences the dynamics of India's external debt, thereby supplementing domestic savings to fund larger investments as the economy expands, it said.</p>.<p>On the contrary, in the pandemic year, it was the relative rise in sovereign debt that accounted for a larger share in the overall growth of foreign debt (2.1 per cent), it said, adding this increase was due to the Covid-19 loans.</p>.<p>On the other hand, within the non-sovereign debt, the growth-sensitive commercial borrowings and import-sensitive short-term trade credit shrank. Therefore, the pandemic disrupted growth-dependent constituents, though overall external debt level rose, it added. </p>.<p><strong>Check out the latest DH videos:</strong></p>
<p>India's external debt rose modestly by 2.1 per cent year-on-year to $570 billion as of March-end 2021, notwithstanding the Covid-19 pandemic, according to the finance ministry.</p>.<p>External debt to GDP ratio rose marginally to 21.1 per cent from 20.6 per cent as of end-March 2020.</p>.<p>Reserves to external debt ratio, however, increased to 101.2 per cent from 85.6 per cent during the same period, thereby consolidating the country's position as a net creditor to the world, as per the status report on India's external debt released by the ministry.</p>.<p>The sovereign debt at $107.2 billion rose higher by 6.2 per cent over its level a year ago, mainly because of an increase in external assistance more than compensating the fall in FPI investment in government securities (G-Secs), it said.</p>.<p>The augmented external assistance reflected larger disbursement of Covid-19 loans from multilateral agencies during 2020-21.</p>.<p>The non-sovereign debt, on the other hand, grew 1.2 per cent on a yearly basis to $462.8 billion.</p>.<p>Commercial borrowings, NRI deposits and short-term trade credit account for 95 per cent of the non-sovereign debt.</p>.<p>While NRI deposits grew 8.7 per cent to $141.9 billion, commercial borrowings at $197.0 billion and short-term trade credit at $97.3 billion shrank by 0.4 per cent and 4.1 per cent, respectively.</p>.<p>At March-end 2021, long-term debt (with original maturity of above one year) was at $468.9 billion, recording an increase of $17.3 billion over the year-ago level.</p>.<p>US dollar-denominated debt remained the largest component of India's external debt, with a share of 52.1 per cent as of March-end 2021, followed by Indian rupee (33.3 per cent), yen (5.8 per cent), SDR (4.4 per cent) and the euro (3.5 per cent).</p>.<p>"Over the years, policy on external debt has enabled the private sector to access foreign debt in a calibrated manner. As at end-March 2021, the level of non-sovereign debt was more than four times that of sovereign debt, compared to half as at end-March 1991," it said.</p>.<p>Given its relative size, typically in a normal year, it is the relative rise in non-sovereign debt that influences the dynamics of India's external debt, thereby supplementing domestic savings to fund larger investments as the economy expands, it said.</p>.<p>On the contrary, in the pandemic year, it was the relative rise in sovereign debt that accounted for a larger share in the overall growth of foreign debt (2.1 per cent), it said, adding this increase was due to the Covid-19 loans.</p>.<p>On the other hand, within the non-sovereign debt, the growth-sensitive commercial borrowings and import-sensitive short-term trade credit shrank. Therefore, the pandemic disrupted growth-dependent constituents, though overall external debt level rose, it added. </p>.<p><strong>Check out the latest DH videos:</strong></p>