India’s external debt increased by $67.5 billion in FY25 to stand at $736.3 billion as at March-end 2025, according to Reserve Bank of India.

Simultaneously, the external debt to GDP ratio increased to 19.1 per cent at end-March 2025 from 18.5 per cent at end-March 2024. In FY24, India’s external debt had increased by $39.7 billion.

External debt to GDP ratio

The central bank said in the reporting period, valuation effect on the external debt due to the appreciation of the US dollar vis-à-vis the Indian rupee and other currencies amounted to $5.3 billion.

Excluding the valuation effect, external debt would have increased by $72.9 billion instead of $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 $601.9 billion, recording an increase of $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).

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 (53.8 per cent at end-March 2024), followed by debt denominated in the Indian rupee (31.1 per cent against 31.5 per cent), yen (6.2 per cent against 5.8 per cent), SDR (4.6 per cent against 5.4 per cent), and euro (3.2 per cent against 2.8 per cent).

Published on June 27, 2025