Consider the following statements:
1. Most of India’s external debt is owed by governmental entities.
2. All of India’s external debt is denominated in US dollars.
Which of the statements given above is/are correct?
Explanation
Statement 1 is incorrect: In India’s external debt structure, the non-government commercial sector accounts for the largest share (primarily through External Commercial Borrowings, NRI deposits, and short-term trade credit), which collectively make up roughly 80% of total external debt, whereas sovereign/government debt forms a much smaller component (around 18% to 20%).
Statement 2 is incorrect: India’s external debt is denominated in multiple international currencies. While the US dollar is the single largest component (holding around 45% to 50%), a significant portion is denominated in the Indian Rupee, SDR, Japanese Yen, and Euro.
Therefore, neither statement is correct — Option D.