India's External Debt Surges: What the Latest RBI Data Reveals

Overview of India's External Debt

Mumbai: As of March 2026, India's external debt reached $762.8 billion, reflecting an increase of $26.3 billion compared to March 2025, as reported by the Reserve Bank of India (RBI) on Monday.

The ratio of external debt to GDP rose to 20.8% at the end of March 2026, up from 19.8% a year earlier.

While the government's outstanding debt saw a decline, non-government debt experienced growth by the end of March 2026, according to the RBI's findings.

Debt servicing, which includes both principal and interest payments, fell to 5.8% of current receipts at the end of March 2026, down from 6.6% in March 2025.

The valuation impact due to the US dollar's appreciation against the Indian rupee and other major currencies was estimated at $24.6 billion. Without this valuation effect, external debt would have risen by $51.0 billion instead of the reported $26.3 billion from March 2025 to March 2026.

At the close of March 2026, long-term debt (with a maturity of over one year) was recorded at $613.5 billion, marking an increase of $11.6 billion from the previous year.

The proportion of short-term debt (with a maturity of up to one year) in total external debt increased to 19.6% at the end of March 2026, compared to 18.3% a year prior. Additionally, the ratio of short-term debt to foreign exchange reserves rose to 21.6% from 20.1%.

On a residual maturity basis, short-term debt accounted for 42.9% of total external debt at the end of March 2026, up from 41.2% in March 2025, and represented 47.3% of foreign exchange reserves, compared to 45.4% the previous year.

Debt denominated in US dollars continued to dominate India's external debt, comprising 55.5% at the end of March 2026, followed by Indian rupee-denominated debt at 29.4%, yen at 6.4%, SDR at 4.3%, and euro at 3.7%.

The share of non-financial corporations in total external debt was the highest at 36.4%, followed by deposit-taking corporations (excluding the central bank) at 26.5%, general government at 22.0%, and other financial corporations at 10.2%.

Loans constituted the largest segment of external debt, accounting for 34.7%, followed by currency and deposits at 22.3%, trade credit and advances at 19.0%, and debt securities at 16.1%, as noted in the RBI statement.