India's External Debt Rises to USD 778.2 Billion

The Reserve Bank of India reported that India's external debt rose to USD 778.2 billion by the end of the June 2026 quarter, an increase of USD 15.4 billion from March 2026. Despite this nominal rise, the external debt-to-GDP ratio moderated slightly to 20.8 per cent from 20.9 per cent. US dollar-denominated debt remains the primary component at 54.8 per cent, with loans accounting for 34.3 per cent of borrowing.

Debt increased across both government and non-government sectors, with the former rising to USD 174.3 billion and the latter reaching USD 603.9 billion. The central bank noted that valuation gains of USD 0.9 billion, resulting from the US dollar's appreciation against the Yen and Euro, offset some of the increase; without this effect, debt would have risen by USD 16.4 billion.

Simultaneously, net claims of non-residents in India increased by USD 16.5 billion during the first quarter of FY26-27 to reach USD 220.3 billion. This shift was driven by a USD 11.6 billion rise in external liabilities and a USD 4.9 billion decline in foreign-owned assets. Consequently, the ratio of international assets to international liabilities moderated to 84.6 per cent from 85.7 per cent. The rise in liabilities was primarily fueled by a USD 15.7 billion increase in direct investment, which compensated for a USD 14 billion decline in portfolio equity investments.