RBI Press Release: 2020-2021/414 dated 30.09.2020

The RBI has released the major statistics and details regarding India’s external debt vide this Press Release. Some key points are: –

i. At end-June 2020, India’s external debt was placed at US$ 554.5 billion, recording a decrease of US$ 3.9 billion over its level at end-March 2020
ii. The external debt to GDP ratio increased to 21.8 per cent at end-June 2020 from 20.6 per cent at end-March 2020.
iii. Commercial borrowings remained the largest component of external debt, with a share of 38.1 per cent, followed by non-resident deposits (23.9 per cent) and short-term trade credit (18.2 per cent).
The Report shows worrying signs as even though the Dollar and Euro depreciated over the past year, India has failed to minimize it’s external debt by any substantive measure. More so, when we take into the account that a few months of this period was a total lockdown with next to none economic activity taking place.