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Indian workers at a factory. (Hemant Mishra/Mint via Getty Images)
India’s currency depreciation has sparked a lot of commentary and expressions of worry from various quarters. However, data from the New York Times/Institute of International Finance suggests that India’s performance is much better than many of the other emerging economies in the matter of non-financial debts.
The data suggests that India’s debt obligation in terms of foreign currencies stood at 15 per cent of the Gross Domestic Product (GDP) which while slightly higher than China’s 14 per cent is much lower than the debt levels of Argentina, Brazil and Russia. Non-financial debts include domestic, government and corporate debts paid back in the foreign currency.
Reports reveal that while Turkey’s foreign currency debt obligation as measured against the GDP is the highest at 70 per cent, other major emerging economies like Russia, Brazil and Argentina also have high debt levels at 25, 26 and 54 per cent of their respective GDPs.
The rupee has been no doubt been hit hard by the global rout in emerging market currencies and has shed 13 per cent of its value since the start of the year. However, as the data reveals, India’s foreign debt levels are at a relatively comfortable level especially when seen in comparison to the debt overhang faced by other emerging economies.
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