India's external debt has increased to $485.8 billion as of June 2017. External debt includes commercial borrowings, NRI deposits, and short-term trade credits. The largest components are commercial borrowings at 37.8% and NRI deposits at 24.3%. Debts are denominated in US dollars, Indian rupees, SDRs, Japanese yen, and euros. India has historically relied on loans from the World Bank and IMF to support economic development projects in infrastructure, agriculture, and other sectors.

1. External Debt Of India
Saloni
Sanghani
Ranjan
Ghoshal
Pooja
Katakwar
Shubham
Lakhanpal
Prajyot
Malve

2. What Is Debt?
Individuals, businesses and governments use common type debt
instruments such as loans, bonds and debentures to raise capital
or generate investment income.
Debt instruments essentially act as an agreement between the
issuer and the purchaser.
In exchange for a lump sum payment, the lender guarantees the
purchaser full repayment of the investment at a later date.
The terms of these types of contracts often include the payment of
interest over time, resulting in cumulative profit for the lender.

3. What Is External Debt?
Gross external debt is
the amount, at any
given time, of disbursed
and outstanding
contractual liabilities of
residents of a country to
non residents to repay
principal, with or
without interest, or to
pay interest, with or
without principal
Debtors can be
sovereign nations,
corporations or
private individuals.
The debt itself can
take the form
of money owed to
private banks,
outside governments
or global financial
institutions like
the World Bank
or International
Monetary Fund
(IMF).

4. External debt is placed within four
broad categories:
Private non-
guaranteed
debt
Public and
publicly
guaranteed
debt
Central bank
deposits
Loans due to
the World
Bank
and IMF

5. What is Sovereign Debt ?
Sovereign debt is how much a country's government owes. It
means the same thing as national debt, country debt or
government debt because the word "sovereign" also means
national government.
It often refers to how much the country owes to outside
creditors, which is why it is often used interchangeably
with public debt.
Sovereign debt is an accumulation of a government's
annual deficits. Therefore, it shows how much more
a government spends than it receives in revenue over time.

6. India and BRICS External Debt
India’s long-term external debt for 2017 is $392,483 million and
short-term debt stands at $81,562 million.
Currently, the external debt to gross national income (GNI) ratio
is 23.4 per cent.
India has a GNI of $2,049,502 million. GNI is the total domestic
and foreign output claimed by residents of a country.

7. India and IMF
India joined the IMF on
December 27, 1945, as one of the
IMF's original members.
India’s executive director in IMF
is Mr. Subir Vithal Gokarn &
Mahinda K.M. Siriwardana
India subscribes to the IMF's
Special Data Dissemination
Standard. Countries belonging
to this group make a
commitment to observe the
standard and to provide
information about their data and
data dissemination practices.

8. India and IMF- Financial Assistance
While India has not
been a frequent user
of IMF resources,
IMF credit has been
instrumental in
helping India
respond to
emerging balance of
payments problems
on two occasions.
In 1981-82, India
borrowed SDR
(Special Drawing
Rights) 3.9 billion
under an Extended
Fund Facility, the
largest arrangement
in IMF history at
the time.
In 1991-93, India
borrowed a total of
SDR 2.2 billion
under two stand by
arrangements, and
in 1991 it borrowed
SDR 1.4 billion
under the
Compensatory
Financing Facility.

9. India and IMF- Technical Assistance
In recent years, the Fund has provided India with technical
assistance in a number of areas, including the development of
the government securities market, foreign exchange market
reform, public expenditure management, tax and customs
administration, and strengthening statistical systems in
connection with the Special Data Dissemination Standards.
Since 1981 the IMF Institute has provided training to Indian
officials in national accounts, tax administration, balance of
payments compilation, monetary policy, and other areas.

10. India and World Bank
The World Bank has given a
large financial assistance to
India for economic
development.
Special mention may be made
of the assistance World Bank
has given to India in the
development of infrastructure
such as electric power,
transport, communication,
irrigation projects, steel
industry.
For a long period, India was the
signal largest borrower from
the World Bank.
At present India is the third
largest borrower of funds from
the World Bank.

11. Why does India needs assistance in
terms of foreign loans ?
International Bank for Reconstruction and Development provide
loans to middle income countries to finance development projects
for furthering economic development and to eradicate poverty.
India as a middle income country is eligible to take loans. The
Government alone cannot finance development projects to meet
all needs of its population due to obvious constraints.
It cannot print money as per needs. The private investment will
also be limited especially if it does not offer any profit.
So the government needs to find some other way to finance these
projects and that is where World Bank has been an immense
source of help.

12. Why does India needs assistance in
terms of foreign loans ?
The World Bank offers flexible loans with maturity period of as
much as 30 years. The interest rate also is lower compared to what
Government has to pay thus making it a really attractive option.
Also due to its relatively higher maturity period the
Government will have And as far as government Finances are
concerned long term debt always better than the short term
ones.
So because of the above reasons the Government finds it much less
riskier to borrow from the World Bank.

13. World Bank’s Debt to India

14. External Debt of India

15. Current standing on external debts
India’s external debt has increased three per cent to $ 485.8
billion at June-end over the previous quarter, mainly due to
increase in inflow of foreign portfolio investment into
domestic capital market’s debt segment.
“At end-June 2017, India’s external debt was placed at $
485.8 billion, recording an increase of $13.96 billion over its
level at end-March 2017,” the Reserve Bank of India said.
The increase in the magnitude of external debt was partly
due to -valuation loss resulting from the depreciation of the
US dollar vis-a-vis the rupee and other major currencies.

16. According to the RBI, the components
of external debts were
Commercial borrowings
(continued to be the
largest component of
external debt with a
share of 37.8 per cent),
NRI deposits (24.3 per
cent)
Short-term trade credit
(17.9 per cent)
Currency-based debt
components -
US dollar denominated
(50.3 per cent followed
by the
Indian rupee (35.4 per
cent),
SDR (5.8 per cent),
Japanese yen (4.5 per
cent) and
Euro (3.0 per cent)

17. Conclusion
The external debt India
owes to its foreign creditors
have been revolving around
US $485.5 billion.
The fund is required for the
government for the
development of the nation’s
economy, pumping money
into the economy and
capital infrastructure
development. T
he external debt comprises
of commercial borrowings,
NRI deposits and short-
term trade credits.
Denominated in dollar,
Indian rupee, SDR (special
drawing right with IMF)
,yen and euro.
Also India has a high
volume and quantum of
debt owing to the World
Bank and IMF.
They have been supporting
the economy of India for
decades altogether

18. Bibliography
 www.tradingeconomics.com
 www.investopedia.com
 www.lencred.com
 www.investinganswers.com
 www.gfmag.com
 www.e.how.com
 www.thebalance.com
 www.livemint.com

19. THANK
YOU
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