India’s External Debt: At end-March 2025, India’s external debt was placed at USD 736.3 billion, an increase of USD 67.5 billion over its level at end-March 2024, according to official RBI data.
The external debt to GDP ratio climbed up to 19.1 per cent at end-March 2025 from 18.5 per cent at end-March 2024.
Valuation effect due to the appreciation of the US dollar vis-à-vis the Indian rupee and other currencies amounted to USD 5.3 billion.
Except the effect of valuation, external debt would have surged by USD 72.9 billion instead of USD 67.5 billion at end-March 2025 over end-March 2024.
At end-March 2025, long-term debt, with original maturity of above one year, was placed at USD 601.9 billion, recording an increase of USD 60.6 billion over its level at end-March 2024.
The share of short-term debt with original maturity of up to one year in total external debt declined to 18.3 per cent at end-March 2025 from 19.1 per cent at end-March 2024. However, the ratio of short-term debt (original maturity) to foreign exchange reserves increased to 20.1 per cent at end-March 2025, 19.7 per cent at end-March 2024.
The short-term debt on residual maturity basis for instance debt obligations that include long-term debt by original maturity falling due over the next twelve months and short-term debt by original maturity constituted 41.2 per cent of total external debt at end-March 2025.
Meanwhile, the US dollar-denominated debt remained the largest component of India’s external debt, with a share of 54.2 per cent at end-March 2025, followed by debt denominated in the Indian rupee at 31.1 per cent, yen 6.2 per cent, SDR2 at 4.6 per cent, and euro at 3.2 per cent.
The outstanding debt of both government and non-government sectors increased at end-March 2025 over the level a year ago.
The share of outstanding debt of non-financial corporations in total external debt was the highest at 35.5 per cent, followed by deposit-taking corporations (except the central bank) at 27.5 per cent, general government (22.9 per cent) and other financial corporations at 9.4 per cent.
Loans remained the largest component of external debt, with a share of 34.0 per cent, followed by currency and deposits at 22.8 per cent, trade credit and advances 17.8 per cent and debt securities, 17.7 per cent.
Debt service for instance, principal repayments and interest payments have marginally declined to 6.6 per cent of current receipts at end-March 2025 from 6.7 per cent at end-March 2024.
