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NEW DELHI: India’s external debt of $624.7 billion at the end of March 2023 with a debt service ratio of 5.3% is within the comfort zone and modest from an international perspective, Prime Minister Nirmala Sitharaman said in her foreword to ‘India’s External Debt: A Status Report 2022-23’ released earlier this month. She said the external debt-to-GDP ratio fell to 18.9% at end-March 2022-2023 from 20% a year ago.
The Long-term debt It constituted 79.4% of the total external debt, while the short-term debt – which amounts to 20.6% of the total external debt – is basically incurred to finance imports, thus increasing the stability aspects of the total external debt , she said. “India’s external debt position is better than that of most low- and middle-income countries, as measured by selected vulnerability indicators,” the minister noted.
According to the report, the debt service ratio increased marginally to 5.3% over 2022-2023 from 5.2% the year before, mainly due to an increase in debt service payments from $41.6 billion in 2021-2023 to $49. $2 billion in 2022-2023. The ratio is measured by the ratio of gross debt service payments to external current receipts, which indicates the degree of preemption of foreign exchange reserves for the purpose of repaying principal and interest from the stock of foreign debt.
The Long-term debt It constituted 79.4% of the total external debt, while the short-term debt – which amounts to 20.6% of the total external debt – is basically incurred to finance imports, thus increasing the stability aspects of the total external debt , she said. “India’s external debt position is better than that of most low- and middle-income countries, as measured by selected vulnerability indicators,” the minister noted.
According to the report, the debt service ratio increased marginally to 5.3% over 2022-2023 from 5.2% the year before, mainly due to an increase in debt service payments from $41.6 billion in 2021-2023 to $49. $2 billion in 2022-2023. The ratio is measured by the ratio of gross debt service payments to external current receipts, which indicates the degree of preemption of foreign exchange reserves for the purpose of repaying principal and interest from the stock of foreign debt.
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