NEW DELHI: India’s exterior debt of $624.7 billion at March-end 2023 with a debt-service ratio of 5.3% is within the comfort zone and modest from a cross-country perspective, FM Nirmala Sitharaman stated in her foreword to ‘India’s External Debt: A Status Report 2022-23’ launched earlier this month. She stated the ratio of exterior debt to GDP declined to 18.9% at March-end 2022-23 from 20% a 12 months in the past.
The long-term debt constituted 79.4% of complete exterior debt, whereas short-term debt – which is 20.6% of the overall exterior borrowing – is mainly incurred to finance imports, enhancing the steadiness points of the overall exterior debt, she stated. “India’s external debt position is better than most of the low and middle-income countries as measured by select vulnerability indicators,” the minister famous.
The report stated the debt service ratio throughout 2022-23 has elevated marginally to five.3% from 5.2% within the earlier 12 months, primarily because of an increase in debt service funds to $49.2 billion in 2022-23 from $41.6 billion in 2021-22. The ratio is measured by the proportion of gross debt service funds to exterior present receipts, which signifies the extent of pre-emption of foreign exchange reserves for the needs of compensation of principal and curiosity out of the inventory of overseas debt.
The long-term debt constituted 79.4% of complete exterior debt, whereas short-term debt – which is 20.6% of the overall exterior borrowing – is mainly incurred to finance imports, enhancing the steadiness points of the overall exterior debt, she stated. “India’s external debt position is better than most of the low and middle-income countries as measured by select vulnerability indicators,” the minister famous.
The report stated the debt service ratio throughout 2022-23 has elevated marginally to five.3% from 5.2% within the earlier 12 months, primarily because of an increase in debt service funds to $49.2 billion in 2022-23 from $41.6 billion in 2021-22. The ratio is measured by the proportion of gross debt service funds to exterior present receipts, which signifies the extent of pre-emption of foreign exchange reserves for the needs of compensation of principal and curiosity out of the inventory of overseas debt.
