Reflecting the strong appetite of India Inc to raise capital overseas, the country's external debt increased by $6.9 billion at the end of June 2006 over the March 2006 figure to touch $132.1 billion, with the largest contribution emanating from the ECB segment.
The external commercial borrowings (ECBs) rose by $5.4 billion during the quarter, highlighting a strong domestic investment activity, the latest figures released by the Reserve Bank of India revealed.
All the components of external debt except rupee debt have risen during the quarter.
The increase is also partly attributed to the decline in the stock of ECBs at end-March 2006. While gross disbursements under ECBs were high during 2005-06, net disbursements had remained low on account of principal repayment of India Millennium Deposits (IMDs), the RBI said.
Under ECB, commercial bank loans and foreign currency convertible bonds (FCCBs) account for the major increase.
The end-June 2006 figures also states that the external debts have been largely in US dollars with the currency accounting for 46.1 per cent of total external debt stock.
There was a prepayment of external bilateral debt amounting to $59.2 million during April-June 2006. The share of concessional debt in total external debt declined to 30.2 per cent at end-June from 31.5 per cent at end-March.
This ratio was around 45.9 per cent at end-March 1991, indicating a gradual increase in non- concessional private debt in external debt stock, the data stated.
Foreign exchange reserves exceeded the external debt by $30.8 billion, providing a cover of 123.3 per cent to the external debt stock at the end of June 2006.
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