India's total external debt rose to $334.9 billion at end-December 2011 This pushed up India's external debt to GDP ratio to 20 per cent as of end-December 2011 The increase in external debt has been due largely to higher commercial borrowings and short-term trade credit . Majority of this Debt (76%) are Long term in nature. One fourth of the total debt is Sovereign in nature. Appx 57% of the Debt is booked in USD and 19% foreign Debt is booked in INR. The increase of External Debt is mainly due to higher commercial borrowings and short term Trade Credit. Increasing external debt clearly shows easy availability of foreign Funds at competitive rate and demand for Import financing. It is definitely concerning as the Forex Reserve comfort to meet external Debt is 89% as against 100% at the beginning of the FY12 financial year
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