India Need to Repay $172 Billion Debt by March 2014

India’s short-term debt maturing within a year would seem to be a matter of concern against the current backdrop of the declining rupee and the U.S. Fed’s possible change of stance on easy liquidity in future.

India’s short-term debt maturing within a year stood at $172 billion end-March 2013. This means the country will have to pay back $172 billion by March 31, 2014.

In March 2008 — before the global financial meltdown that year — it was just $54.7 billion.

India has accumulated a huge short-term debt with residual maturity of one year after 2008.

The figure has gone up over three times largely because this period also coincided with the unprecedented widening of the current account deficit from roughly 2.5 % in 2008-09 to nearly 5 % in 2012-13.

The short-term debt maturing within a year is now nearly 60 %of India’s Total Foreign Exchange Reserves. In March 2008, it was only 17 % of total Forex Reserves.

External Commercial Borrowings(ECB) are now 31% of the country’s total external debt of $390 billion as of 31 March 2013. Short-term debt with one year maturity is 25 % of total external debt.

The Corporate Borrowings payable by end March 2014, is 44 %of the India’s External Debt or $172 billion