INDIA’S EXTERNAL DEBT A STATUS REPORT 2019-20 GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFAIRS EXTERNAL DEBT MANAGEMENT UNIT www.finmin.nic.in Table of Contents Executive Summary ............................................................................................................... 10 Chapter 1 India’s External Debt: An Overview ................................................................. 12 1.1 Introduction .................................................................................................................... 12 1.2 Stock of India’s External Debt ....................................................................................... 13 1.3 External Debt and Valuation Effect ............................................................................... 16 1.4 External Debt and GDP .................................................................................................. 17 1.5 External Debt to Foreign Exchange Reserves ................................................................ 18 Chapter 2 Classification of India’s External Debt .............................................................. 20 2.1 Sector-wise classification ............................................................................................... 24 2.2 Creditor-wise classification ............................................................................................ 25 2.3 Debtor-wise classification .............................................................................................. 30 2.4 Currency-wise classification .......................................................................................... 33 2.5 Instrument-wise classification ........................................................................................ 34 2.6 Maturity-wise classification ........................................................................................... 35 2.6.1 Total External Debt by Original Maturity ............................................................... 35 2.6.2 Total External Debt by Residual Maturity .............................................................. 37 2.6.3 Short-term Debt by Original Maturity ..................................................................... 38 2.6.4 Short-term Debt by Residual Maturity .................................................................... 41 2.7 Concessionality-wise Classification ............................................................................... 43 Chapter 3 Sovereign External Debt ..................................................................................... 46 3.1 Introduction .................................................................................................................... 46 3.2 Composition of Sovereign External Debt ...................................................................... 47 3.2.1 Composition of External Assistance........................................................................ 48 3.2.2 Composition of Other Government Debt (OGD) .................................................... 51 3.3 Currency Composition of Government (Sovereign) External Debt ............................... 52 3.4 Sovereign External Debt Service Payments ................................................................... 54 Table of Contents 3.5 Contingent liability ......................................................................................................... 56 3.6 Projections of Sovereign External Debt Service Payments ........................................... 58 Chapter 4 India’s External Debt Service Payments ........................................................... 62 4.1 Introduction .................................................................................................................... 62 4.2 India’s External Debt Service Payments ........................................................................ 63 4.3 Terms of borrowings ...................................................................................................... 67 4.3.1 Implicit Interest Rate ............................................................................................... 67 4.3.2 Average Terms of New Commitments .................................................................... 68 4.4 Projections of external debt service payments ............................................................... 69 Chapter 5 India’s External Debt Position: A Cross-Country Perspective ....................... 72 5.1 Introduction .................................................................................................................... 72 5.2 Stock of External Debt: India vs. The world .................................................................. 73 5.2.1 Global Stock of External Debt ................................................................................. 73 5.2.2 Global Stock of External Debt: Maturity-Wise ....................................................... 75 5.2.3 Global Stock of External Debt: Sector-Wise ........................................................... 76 5.3 Stock of External Debt: India vs Low and Middle-Income Countries (LMICs) ........... 77 5.3.1 Financial Flows to LMICs ....................................................................................... 80 5.3.2 External Debt Vulnerability Indicators: India vs. LMICs ....................................... 81 5.3.3 Overview ................................................................................................................. 82 5.3.4 Present Value of External Debt ............................................................................... 82 Annexes ................................................................................................................................... 85 _________________________________________________________________________ 2 India’s External Debt: A Status Report: 2019-2020 Table of Contents Tables Table 1:1: India's External Debt Stock .................................................................................... 13 Table 2:1: India’s External Debt: Sovereign and Non-Sovereign ........................................... 25 Table 2:2: India's External Debt: Creditor-Wise ..................................................................... 26 Table 2:3: India’s External Debt: Debtor-Wise ....................................................................... 31 Table 2:4: India’s External Debt: Instrument-Wise ................................................................. 35 Table 2:5: Residual Maturity of External Debt Outstanding as At End-March 2020 ............. 37 Table 2:6: India’s Short-Term Debt by Residual Maturity ...................................................... 42 Table 3:1: Projections of Sovereign External Debt Service Payments: Creditor-Wise .......... 59 Table 4:1: Disbursements and Principal Repayments Under Short-Term Debt ...................... 66 Table 4:2: Implicit Interest Rates on India’s External Debt: Source-Wise ............................. 67 Table 4:3: Average Terms of New Commitment For India ..................................................... 68 Table 4:4: Projections of External Debt Service Payments: Creditor-Wise ............................ 69 Table 5:1: Gross External Debt Stock of Top Twenty Countries ............................................ 73 Table 5:2: External Debt of Developing Countries: Key Indicators........................................ 78 Table 5:3: Aggregate Net Financial Flows To Low and Middle-Income Countries ............... 80 FIGURES Figure 1:1: External Debt and Valuation Effect ...................................................................... 17 Figure 1:2: India's External Debt and GDP ............................................................................. 18 Figure 1:3: Ratio of Foreign Exchange Reserves to External Debt ......................................... 18 Figure 2:1: Share of External Debt as at-End March 2020: Creditor-Wise ............................. 27 Figure 2:2: India's External Debt: Currency Composition ...................................................... 34 Figure 2:3: India’s External Debt: Maturity-Wise ................................................................... 36 Figure 2:4: Share of Long-Term And Short-Term Debt .......................................................... 36 _________________________________________________________________________ 3 India’s External Debt: A Status Report: 2019-2020 Table of Contents Figure 2:5: Imports and Trade Credit ...................................................................................... 38 Figure 2:6: India’s External Debt: Concessional and Non-Concessional Debt ....................... 43 Figure 3:1: Total Sovereign External Debt .............................................................................. 47 Figure 3:2: Composition of Sovereign External Debt ............................................................. 48 Figure 3:3: Composition of External Debt on Govt. Account Under External Assistance Programme........................................................................................................................ 49 Figure 3:4: Multilateral Debt as at End-March 2020 ............................................................... 50 Figure 3:5: Bilateral Debt as at End-March 2020 .................................................................... 50 Figure 3:6: Composition of OGD ...........................................................................................