India’s external debt increased to $762.8 billion as of the end of March 2026, reflecting a rise of $26.3 billion compared to the previous year, according to data released by the Reserve Bank of India (RBI) on Monday.
The central bank noted that a significant portion of the increase was influenced by valuation effects arising from the appreciation of the US dollar against the Indian rupee and other major global currencies.
According to the RBI’s report on India’s external debt position, valuation changes alone accounted for $24.6 billion. Excluding this impact, the actual rise in external debt would have been higher at $51 billion over the same period.
The debt-to-GDP ratio also edged up, rising to 20.8% at the end of March 2026 from 19.8% a year earlier, indicating a marginal increase in external vulnerability relative to economic output.
In terms of maturity structure, long-term debt—defined as borrowings with an original maturity of more than one year—stood at $613.5 billion, reflecting an increase of $11.6 billion over the previous year.
At the same time, short-term debt (with maturity up to one year) grew at a faster pace, increasing its share in total external debt to 19.6%, up from 18.3% in the previous year.
The RBI also highlighted a rise in short-term debt relative to foreign exchange reserves, with the ratio increasing to 21.6% from 20.1% a year earlier, signalling a modest increase in near-term repayment obligations compared to available reserves.
Currency composition data showed that US dollar-denominated debt continued to dominate India’s external borrowings, accounting for 55.5% of total debt.
This was followed by Indian rupee-denominated debt at 29.4%, Japanese yen at 6.4%, Special Drawing Rights (SDR) at 4.3%, and euro-denominated debt at 3.7%.
On the sectoral side, RBI noted that government external debt declined slightly, while non-government external debt increased over the year, indicating greater participation from private borrowers.
By instrument category, loans remained the largest component of external debt at 34.7%, followed by currency and deposits at 22.3%, trade credit and advances at 19%, and debt securities at 16.1%.
Overall, the data reflects a gradual increase in India’s external liabilities, with shifts in composition toward short-term borrowings and continued dominance of dollar-denominated exposure.
