As per the RBI report, India’s external debt rose to US$ 736.3 billion (March 2025), marking an increase of US$ 67.5 billion over the previous year, excluding valuation effects.
- Valuation effect occurs due to the appreciation of US dollar vis-à-vis the Indian Rupee.
Key Highlights
- External Debt to GDP Ratio: Increased to 19.1%, up from 18.5% in March 2024.
- Long Term & Short Term Debt: long-term debt ($601.9 billion) rose marginally while the share of short-term debt fell marginally to 18.3%.
- Composition: US dollar (54.2%) remained the largest component, followed by the Indian rupee (31.1%), Japanese yen, & SDRs respectively.
- Borrowers: Non-financial corporations (except the central bank) held the highest share i.e., 35.5%, followed by deposit-taking corporations (27.5%) & general government (22.9%).
- Debt Instrument: Loans (34%) remained the largest component, followed by currency and deposits.
- Debt service (i.e., principal repayments and interest payments) marginally declined by 0.1%.
What is External Debt?
- External debt refers to money borrowed from a source outside the country.
- Sources: Foreign commercial banks, international financial institutions like IMF, World Bank, etc. and government of foreign nations.
