India external debt 2025 data shows a significant increase: as per the Reserve Bank of India (RBI), the country’s total external debt jumped by $67.5 billion to touch $736.3 billion at the end of March 2025. This is a 10% rise year-on-year from $668.8 billion at the end of March 2024
📈 Why India external debt 2025 is rising
- Global dollar effect: Nearly $5.3 billion of the increase was due to the valuation effect, as the US dollar gained strength against the rupee and other major currencies
- New borrowings: Excluding valuation, net fresh borrowing was about $72.9 billion.
- Growth push: Rising debt supports investments in infrastructure, industry, and digital projects.
🏦 Composition of India external debt 2025
- Long-term debt: Rose by $60.6 billion to $601.9 billion, making up over 81% of total debt.
- Short-term debt: Its share fell to 18.3% from 19.1%, but its ratio to forex reserves increased slightly to 20.1% outlookbusiness
Currency-wise:
- US dollar: 54.2%
- Indian rupee: 31.1%
- Japanese yen: 6.2%
- SDR: 4.6%
- Euro: 3.2%
Sector-wise:
| Sector | Debt (US$ billion) |
|---|---|
| Non-financial corporations | 261.7 |
| Deposit-taking corporations | 202.1 |
| Government | 168.4 |
📊 India external debt 2025 as % of GDP
The debt-to-GDP ratio went up slightly to 19.1% from 18.5% in FY24
This means India’s external debt is growing faster than GDP, but still remains at a moderate level compared to many emerging economies.
🔍 What experts say
- The increase shows higher capital inflows and confidence in India’s growth story.
- Rising USD share means exchange rate risk: if the dollar strengthens further, debt costs may rise.
- Valuation effects show how external factors (like dollar strength) can inflate debt numbers even without new borrowings.
📅 Recent context: Current account surplus
India posted a $13.5 billion current account surplus in Jan-Mar 2025, which helps build reserves to manage external debt risks.
🌏 Why India external debt 2025 matters
- Supports economic growth and infrastructure.
- Needs careful management to avoid vulnerability to currency swings.
- Valuation-driven rises highlight the need to diversify borrowing away from USD.
✅ Quick summary
| Indicator | March 2024 | March 2025 |
|---|---|---|
| Total external debt | $668.8 bn | $736.3 bn |
| YoY change | – | +$67.5 bn |
| Debt-to-GDP ratio | 18.5% | 19.1% |
| USD share | 53.8% | 54.2% |
📌 Conclusion
The India external debt 2025 data reflects a rise driven by new borrowings and currency valuation effects. While India’s external debt remains manageable as a share of GDP, high USD exposure and global market volatility remain risks to watch.
