India’s total external debt grew by USD 15.4 billion to reach USD 778.2 billion by the end of the June 2026 quarter compared to the preceding March quarter, according to Reserve Bank of India data published Wednesday.
Despite the absolute increase, the external debt-to-GDP ratio improved slightly, dropping to 20.8 percent at the end of June 2026 from 20.9 percent on March 31, 2026.
"Valuation gains due to the appreciation of the US dollar vis-à-vis major currencies such as Yen and Euro amounted to USD 0.9 billion. Excluding the valuation effect, external debt would have increased by USD 16.4 billion instead of USD 15.4 billion at end-June 2026 over end-March 2026," RBI said.
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Long-term obligations (maturities exceeding one year) expanded to USD 624.7 billion in the June quarter, marking an $11.2 billion rise over March levels.
Concurrently, short-term debt (maturities up to one year) edged up to 19.7 percent of overall external debt at the close of June 2026, compared to 19.6 percent in the previous quarter. The ratio of short-term debt relative to foreign exchange reserves also ticked up from 21.6 percent at end-March to 23 percent at end-June.
Dollar-backed liabilities continued to form the bulk of India's external obligations. RBI noted that US dollar-denominated debt remained the largest component of India's external debt, with a share of 54.8 per cent at end-June 2026, followed by debt denominated in the Indian rupee (29.8 per cent), Yen (6.9 per cent), SDR2 (4.1 per cent), and Euro (3.5 per cent).
"Outstanding debt of both government and non-government sectors increased at end-June 2026 over its level at end-March 2026," it said.
In terms of instrument breakdown, loans represented the single largest share of liabilities at 34.3 percent, followed by currency and deposits at 22.2 percent, trade credit and advances at 19.1 percent, and debt securities at 16.5 percent.
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Meanwhile, the country's debt service ratio—comprising principal repayments and interest obligations, remained steady at 5.6 percent of current receipts, matching the figure recorded in March 2026.
(With inputs from agency)
