India's external debt position widens

Mumbai: India’s external debt was at $762.8 billion at the end of March 2026 up $26.3 billion from a year ago.

As a result, the external debt to GDP ratio increased to 20.8% at the end of March 2026 from 19.8% a year ago.The valuation effect due to the appreciation of the US dollar vis-à-vis the Indian rupee during the quarter and other major currencies amounted to $24.6 billion, RBI said.

Excluding the valuation effect, external debt would have increased by $51 billion instead of $26.3 billion year on year.“At the end of March 2026, long-term debt (with original maturity of above one year) was placed at $613.5 billion, recording an increase of $11.6 billion over its level at end-March 2025.

The share of short-term debt (with original maturity of up to one year) in total external debt increased to 19.6% at end March 2026 from 18.3% at end March 2025.

Similarly, the ratio of short-term debt (original maturity) to foreign exchange reserves increased to 21.6% up from 20.1% reported at the end of March 2025,” Rbi said.US dollar-denominated debt remained the largest component of India’s external debt, with a share of 55.5% as of March 2026, followed by debt denominated in the Indian rupee (29.4%), yen (6.4%), special drawing rights with IMF (4.3%) and euro (3.7%).Loans remained the largest component of external debt, with a share of (34.7%), followed by currency and deposits (22.3%), trade credit and advances (19%) and debt securities (16.1%).

“Debt service (i.e., principal repayments and interest payments) declined to 5.8% of current receipts at end March 2026 from 6.6% a year ago,” RBI said. ...