Analysts had expected the current account deficit to come in at around 4.2 per cent. However, the lower then expected CAD failed to bring respite to the falling rupee, which gained only 28 paise in early trade.
India's external debt, as at end-March 2013, was placed at US$ 390.0 billion showing an increase of US$ 44.6 billion or 12.9 per cent over the level at end-March 2012. The increase in total external debt during financial year 2012-13 was primarily on account of rise in short-term trade credit. There has been sizeable rise in external commercial borrowings (ECBs) and rupee denominated Non-resident Indian deposits as well.
"The high current account deficit witnessed during 2012-13 and it's financing increasingly through debt flows particularly by trade credit resulted in significant rise in India's external debt during 2012-13. However, magnitude of increase in external debt was offset to some extent due to valuation change (gain) resulting from appreciation of US dollar against Indian rupee and other international currencies," the RBI has stated in a release.