The government announced on Monday that it would repay early ADB and IBRD loans worth a total of $2.803 billion through domestic foreign exchange reserves in the financial year ending March 2003.
A government statement said the Asian Development Bank loan was worth $1.254 billion and the International Bank for Reconstruction and Development, was worth $1.549 billion.
The loan repayment would be entirely financed by domestic market borrowings, the statement said, adding this was the first time the government was "repaying external debt of this size ahead of schedule."
India has a record $72.4 billion forex reserves, among the largest in the world, which have been rising on strong remittances from expatriate Indians, trade and foreign investments.
The government has been using the reserves to repay foreign debt, which totaled $98.1 billion at the end of the last fiscal year in March 2002. The external debt was $99.7 billion in the previous year.
