Rise of India’s External Debt | 27 Jun 2024

India's External debt increased by USD 39.7 billion from March 2023 to reach USD 663.8 billion as of end-March 2024.

External Debt is money borrowed from a source outside the country, which needs to be repaid in the borrowed currency.
- It can be obtained from foreign commercial banks, international financial institutions such as the IMF and the World Bank, and from foreign governments.
The external debt-to-GDP ratio declined from 19.0% at end-March 2023 to 18.7% at end-March 2024.
There was a USD 45.6 billion increase in long-term debt (maturing in over a year) to reach USD 541.2 billion in March 2024.
- Proportion of short-term debt (maturing in up to a year) decreased from 20.6% to 18.5%.
- The ratio of short-term debt to forex reserves declined from 22.2% to 19%.
India's external debt as of March 2024 was primarily in US Dollars (53.8%), followed by Indian rupees (31.5%), yen (5.8%), SDR (5.4%), and euro (2.8%).
- There was an increase in debt of both government and non-government sectors.
Non-financial corporations held the highest share of outstanding debt (37.4%) followed by deposit-taking corporations (except the central bank)( 28.1%), general government (22.4%) and other financial corporations (7.3%).
Loans constitute 33.4% of external debt, followed by currency and deposits (23.3%), trade credit and advances (17.9%), and debt securities (17.3%).