Our liabilities were mainly on account of portfolio investment, FDI and external commercial loans. The bulk of our international assets are in the form of foreign exchange reserve assets of the RBI, followed by direct investment abroad by the corporate sector. While IIP gives the full balance sheet picture, how has our external-debt position shaped, given our preference for non-debt creating flows?
Notably, India’s external debt stock remained steady during the 13-year period between 1991 and 2003 in the range of US $ 84-105 billion. Since then, the debt stock has risen to US $ 306 billion by March 2011. However, the ratio of India’s external debt to GDP has declined over the years from 28.7 per cent in 1990–91 to 17.3 per cent in 2010–11.