Mumbai– India’s external debt for the quarter ended June 2018 declined on a year-on-year basis by 2.8 per cent to $514.4 billion, official data showed on Friday.

According to the Reserve Bank of India, external debt declined to $514.4 billion from over $529 billion reported for the corresponding period of 2017 on the back of a decrease in commercial borrowings, short-term debt and non-resident Indian (NRI) deposits.

“At June-end, India’s external debt witnessed a decline of 2.8 per cent over its level at March-end…,” the RBI said in a statement on “India’s External Debt as at the end of June 2018”.

“The decrease in external debt was primarily due to valuation gains resulting from an appreciation of the US dollar against the Indian rupee and major currencies. The external debt to GDP ratio stood at 20.4 per cent at June-end, a shade lower than its level of 20.5 per cent at March-end.”

As per the statement, valuation gains due to the appreciation of the US dollar vis-à-vis the Indian rupee and major currencies were placed at $13 billion.

“Excluding the valuation effect, the decrease in external debt would have been $1.9 billion instead of $14.9 billion at June-end over March-end,” the statement said.

“Commercial borrowings continued to be the largest component of external debt with a share of 37.8 per cent, followed by NRI deposits at 24.2 per cent and short-term trade credit at 18.8 per cent.” (IANS)