India’s external debt reached US$ 762.8 billion at end-March 2026, according to the Reserve Bank of India. This marks an increase of US$ 26.3 billion over end-March 2025. The external debt to GDP ratio also rose to 20.8 per cent from 19.8 per cent a year ago.
Key Details of India’s External Debt in 2026
Long-term debt stood at US$ 613.5 billion, rising by US$ 11.6 billion over March 2025. Meanwhile, short-term debt increased its share to 19.6 per cent of total external debt. Additionally, the ratio of short-term debt to foreign exchange reserves moved up to 21.6 per cent from 20.1 per cent.
The US dollar remained the dominant currency, accounting for 55.5 per cent of total debt. The Indian rupee followed at 29.4 per cent, then yen at 6.4 per cent, SDR at 4.3 per cent, and euro at 3.7 per cent. Loans formed the largest instrument share at 34.7 per cent of total external debt.
It is important to note that a stronger US dollar created a valuation effect of US$ 24.6 billion. Therefore, excluding this effect, external debt would have risen by US$ 51.0 billion instead. This context helps assess the actual growth in borrowings more accurately.
What This Means for India’s Debt Management
Non-financial corporations held the largest share of external debt at 36.4 per cent. Deposit-taking corporations followed at 26.5 per cent, while the general government accounted for 22.0 per cent. However, government debt slightly declined by US$ 0.9 billion over the year.
India’s debt service ratio improved noticeably, falling to 5.8 per cent of current receipts from 6.6 per cent in March 2025. As a result, the country’s ability to manage repayments has strengthened. Foreign exchange reserves covered 90.6 per cent of total external debt, indicating a broadly stable position.
Short-term debt on a residual maturity basis stood at 42.9 per cent of total external debt. This ratio also rose to 47.3 per cent of foreign exchange reserves. For example, deposit-taking corporations alone carried US$ 127.7 billion in short-term residual maturity obligations.
Overall, India’s external debt profile remains manageable, though the rising short-term share warrants close monitoring. The RBI will continue to release updated data as revisions are finalised.
Source: RBI Press Releases
