Page 480 - ES 2020-21_Volume-1-2 [28-01-21]

External Sector 107

3.23 Among other forms of capital flows, banking capital recorded a net outflow of US$ 8.9
billion in H1: FY 2020-21, higher than the net outflow of US$ 5.7 billion, in first half of 2019-
20. With repayments exceeding fresh disbursals, net outflows on ECBs increased to US$ 5.7
billion in April-September, 2020. Net inflow on account of non-resident deposits was US$ 4.9
billion, as against US$ 5.0 billion in April-September, 2019.
External Debt

3.24 At end-September 2020, India’s external debt was placed at US$ 556.2 billion recording
a decrease of US$ 2.0 billion (0.4 per cent) over the level, as at end-March 2020. Excluding the
valuation loss, due to the depreciation of the US$ vis-à-vis major currencies, the decrease in
external debt would have been US$ 8.3 billion. ECBs, the largest component of external debt, at
US$ 207 billion as at end- September 2020, contracted by 5.8 per cent over the level as at end-
March 2020 (Box 3). While the stock of NRI deposits, the second largest component, rose 5.1
per cent to US$ 137.3 billion over the level as at end-March 2020, the (import-financing) trade
credit, the third largest component at US$ 99.4 billion shrank by 2.0 per cent. Government debt
increased to US$ 103.6 billion from US$ 100.9 billion as at end-March 2020.

Box 3: ECBs- Gradual Easing of Policy
The outstanding ECBs as at end-September 2020 at US$ 163.8 billion was lower than US$
164.7 billion, as at end-March 2020. Bulk of the ECBs was in the form of commercial loans
and securitized borrowings (91.2 per cent) (Figure B3.1) predominantly denominated in US$
(77.2 per cent) and accessed mainly by non-financial corporations (74.5 per cent). While
the average maturity of the ECBs was 6 years, cost of ECBs, as measured by the average of
monthly weighted average margin over the reference rate for the loans registered during April-
September 2020, at 1.9 per cent was higher than observed in the recent years (Figure B3.2).

Figure B3.1: Stock of ECBs: Instrument-wise

Multilateral Bilateral
Export Credit Commercial Loan
Securitized Instruments FCCB
IFC Total Stock of ECB
200
164.7 163.8
150 123.4 126.4 137.0 41.1 44.8
US$ Billion 100 17.2 24.3 26.6

50 87.5 84.7 95.4 109.7 104.7

0
2017 2018 2019 2020 2020
End-March End-Sep

Source: RBI