TL;DR: India’s external debt has increased significantly over the past three decades, reaching $762.8 billion in March 2026 and $778.2 billion by the end of June 2026 (Provisional). However, key indicators such as the debt-to-GDP ratio and debt service ratio have declined over the past decade, while long-term debt continues to account for the majority of total external debt.

Context

External debt refers to the money owed by residents of a country to creditors outside the country. In India’s case, it includes borrowings by the government, banks, financial institutions and businesses from foreign lenders, as well as other forms of external liabilities. External debt is an important indicator of the country’s external financial position because it reflects the extent to which the economy relies on foreign sources of financing.

The size of external debt alone does not indicate whether the debt burden is high or low. Its composition is also important. Factors such as the share of government and non-government debt, short-term and long-term debt, currency composition and the level of foreign exchange reserves influence the country’s ability to meet its external obligations. Indicators such as external debt to GDP and the ratio of debt servicing payments to current receipts are therefore used to assess the sustainability of external debt. In this story, we will explore some of these indicators.

Who compiles this data?
The Reserve Bank of India (RBI) and the Department of Economic Affairs (DEA), Ministry of Finance, are the key government institutions involved in compiling and publishing India’s external debt statistics.

Where can I download clean & structured data related to this?

Clean, structured, and ready-to-use datasets related to India’s External Debt Status are available on Dataful. These datasets provide comprehensive insights into India’s external debt, including the share of sovereign and non-sovereign debt in total external debt, key ratios for assessing external debt vulnerability, and classifications by currency and creditor.

Key Insights

• India’s external debt has increased substantially over the past three and a half decades, increasing from $83.8 billion in 1991 to $762.8 billion in March 2026. It stood at $778.2 billion at the end of June 2026 (Provisional). The sharpest increase was recorded between 2006 and 2014, when external debt more than tripled.

• External debt has continued to increase in recent years, although at a slower pace. It increased by 3.6% between March 2025 and March 2026. Except for occasional declines, including a marginal contraction in 2017, the overall trend has remained upward.

• Non-government entities account for the majority of India’s external debt. Their external debt increased from $391.2 billion in 2016 to $595.3 billion in 2026, accounting for nearly four-fifths of total external debt.

• The broad composition of external debt has remained relatively stable over the past decade. Government debt accounted for 18% to 23% of total external debt, while non-government debt accounted for 77% to 82%. The government’s share stood at 22.0% in 2026, down from 22.9% in 2025.

• External debt is divided based on maturity. Long-term debt consists of liabilities with an original maturity of more than one year, while short-term debt comprises obligations due within one year or less.

• Long-term debt makes up the bulk of India’s external debt. It increased from $401.3 billion in 2016 to $613.5 billion in 2026 and accounted for around four-fifths of total external debt throughout the period.

• Short-term external debt increased from $83.5 billion in 2016 to $149.2 billion in March 2026. Despite this increase, its share of total external debt remained broadly stable at around 19% to 20%.

• Short-term government external debt has remained relatively small. It stayed below $1 billion throughout the decade, with the bulk of short-term external debt being held by non-government entities.

• External debt as a share of GDP declined over the past decade, from 23.4% in 2016 to 20.9% in 2026. It stood at 20.8% at the end of June 2026 (Provisional), indicating that external debt has grown more slowly than the overall size of the economy over this period.

• India’s debt service ratio declined from 8.8% in 2016 to 5.6% in 2026. The ratio measures principal and interest payments on external debt as a share of current receipts. It was substantially higher in the early 1990s, when it exceeded 35%.

• Foreign exchange reserves covered 90.6% of India’s external debt in March 2026, compared with 74.3% in 2016. The coverage ratio stood at 85.9% at the end of June 2026 (Provisional), after reaching above 100% in 2021.

Why does it matter?

The increase in India’s external debt does not, by itself, indicate a growing vulnerability. The trends suggest that the increase in debt has broadly been accompanied by an expansion in the economy and an improvement in India’s capacity to meet external obligations. The relatively stable composition of the debt also indicates that the increase has not been driven by a sharp shift towards short-term borrowing. Overall, the figures point to a gradual increase in external liabilities rather than a sharp deterioration in India’s external position. The absolute rise in debt, however, remains worth monitoring as future borrowing, repayment obligations and economic growth can change the overall picture.

Key Numbers

• $83.8B → $762.8B | External debt, 1991 → 2026

• 3.6% ↑ | External debt growth, 2025 → 2026

• ~80% | Share of non-government external debt

• ~80% | Share of long-term external debt

• 23.4% → 20.9% | External debt-to-GDP ratio, 2016 → 2026

• 8.8% → 5.6% | Debt service ratio, 2016 → 2026

• 74.3% → 90.6% | Forex reserves as % of external debt, 2016 → 2026