India's external debt reaches $778.2 billion as debt-to-GDP ratio moderates to 20.8%
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What happened
India’s external debt rose by $15.4 billion between March and June 2026 to reach $778.2 billion, according to the Reserve Bank of India. US dollar appreciation generated a $0.9 billion valuation gain, without which debt would have grown by $16.4 billion. Long-term obligations increased to $624.7 billion, while short-term debt by original maturity expanded to $153.5 billion, representing 19.7% of total debt.
Why it matters
Despite nominal debt growth, India's debt-to-GDP ratio improved slightly to 20.8% and its debt service ratio held steady at 5.6% of current receipts. However, short-term debt on a residual maturity basis—obligations due within 12 months—rose to 50.5% of foreign exchange reserves from 47.3% at end-March 2026, tightening the short-term coverage cushion.
Bigger picture
Non-financial corporations remain the largest borrower group at 36.1% ($281.2 billion) of obligations, with government debt at 22.4% ($174.3 billion). By instrument, loans represent 34.3% of obligations. The debt portfolio remains concentrated in US dollars at 54.8%, while rupee-denominated debt stands at 29.8%, Yen at 6.9%, and Euro at 3.5%.
Watch next
Watch upcoming Reserve Bank of India quarterly debt updates for potential shifts in short-term residual debt relative to foreign exchange reserves and changes in corporate foreign currency borrowing.