MUMBAI: India’s external debt rose 10 per cent year-on-year to $736.3 billion at the end of March 2025 from $668.8 billion a year ago, according to data released by the Reserve Bank of India (RBI) on Friday.
The external debt-to-GDP ratio also inched up to 19.1 per cent from 18.5 per cent in the previous year.
While the overall foreign debt rose sharply, only $168.4 billion of this was owed by the government. The rest was largely accounted for by non-government entities. Non-financial corporations alone held $261.7 billion in external debt, while deposit-taking corporations (excluding the central bank) owed $202.1 billion.
Forex reserves
India’s foreign exchange reserves, at around $642 billion as of March-end 2025, cover about 87 per cent of the country’s external debt. However, the ratio of short-term external debt to forex reserves edged up to 20.1 per cent from 19.7 per cent in the previous year.
According to the RBI, the appreciation of the US dollar against the rupee and other major currencies led to a valuation impact of $5.3 billion.
If this valuation effect is excluded, the underlying increase in external debt during the year would have been $72.9 billion, instead of the reported $67.5 billion.
Long-term debt at $602bn
Long-term debt, with original maturity of more than one year, stood at $601.9 billion as of March-end 2025 – an increase of $60.6 billion over the year. The share of short-term debt in total external debt declined to 18.3 per cent from 19.1 per cent a year earlier.
US dollar-denominated debt continued to form the largest share of India’s external debt at 54.2 per cent, followed by rupee-denominated debt at 31.1 per cent, Japanese yen at 6.2 per cent, SDRs at 4.6 per cent, and euro-denominated debt at 3.2 per cent.
In terms of instruments, loans remained the largest component, accounting for 34 per cent of total external debt. This was followed by currency and deposits (22.8 per cent), trade credit and advances (17.8 per cent), and debt securities (17.7 per cent).
