NEW DELHI: India’s external debt rose 1.7% to $483.2 billion at the end of September from the level in March due to long-term liabilities, especially commercial borrowings and non-resident Indian deposits. The increase would have been higher than $8 billion if not for valuation gains from the appreciation of the US dollar against the rupee and most major currencies, estimated at $5.7 billion.“Excluding the valuation effect, the increase in debt would have been higher by $13.7 billion at end-September 2015 over the end-March 2015 level,” the finance ministry said in a report. Sequentially, external debt declined by $291 million from the level at the end of June.“Benefitting from the valuation effect, external debt in USD terms recorded a decline in sequential quarters at end-September 2015 after a gap of nine quarters,” said Aditi Nayar, a senior economist at ICRA. “Nevertheless, the vulnerability assessed by indicators such as the coverage provided by foreign exchange reserves, external debt to GDP and the proportion of short-term debt within total external debt worsened at end-September 2015 relative to end-June 2015.”Foreign exchange reserves provided cover for 72.5% of the country’s external debt compared with 71.9% in March.“The government will continue to focus on monitoring long- and short-term debt, raising sovereign loans on concessional terms with longer maturities, regulating external commercial borrowings through end-use and rationalising interest rates on NRI deposits,” the ministry said. The share of commercial borrowings in India’s external debt was the highest at 37.7%, followed by NRI deposits (25.2%) and multilateral debt (11%).Earlier this year, the Reserve Bank of India relaxed guidelines to help Indian companies raise funds in rupees from overseas lenders. The move was aimed at shifting the forex risk to lenders and ease pressure on foreign exchange reserves if the rupee depreciates.Long-term debt, which accounted for 82.2% of total external debt in September, was placed at $397.1 bn, an increase of 1.9% from March. Short-term external debt increased 0.7% to $86.1 billion.