India's external debt rises to $762.8 billion in FY26; debt-to-GDP ratio climbs to 20.8%: RBI data

India's external debt rose to $762.8 billion at the end of March 2026, an increase of $26.3 billion over a year earlier, while the external debt-to-GDP ratio increased to 20.8% from 19.8%, the Reserve Bank of India (RBI) said in a statement on Monday.

The central bank said the headline increase was tempered by currency valuation effects during the year. "Valuation effect due to the appreciation of the US dollar vis-à-vis the Indian rupee and other major currencies amounted to $24.6 billion," the RBI said in the statement.

Currency movements mask higher underlying borrowings

The RBI said the underlying increase in external borrowings was significantly higher than the headline number after adjusting for exchange-rate movements.

"Excluding the valuation effect, external debt would have increased by $51 billion instead of $26.3 billion at end-March 2026 over end-March 2025," the central bank said in the statement.

The data suggests that while appreciation of the US dollar reduced the reported increase in India's external debt, overseas borrowings expanded at a much faster pace during FY26.

Short-term debt share edges higher

Long-term external debt, with an original maturity of more than one year, stood at $613.5 billion at the end of March 2026, an increase of $11.6 billion over the previous year.

The RBI also pointed to a rise in short-term liabilities. "The share of short-term debt (with original maturity of up to one year) in total external debt increased to 19.6% at end-March 2026 from 18.3% at end-March 2025," the statement said.

Similarly, the ratio of short-term debt to India's foreign exchange reserves rose to 21.6% from 20.1% a year earlier, indicating a modest increase in near-term repayment obligations relative to the country's reserve cushion.

Loans remain the largest component

According to the RBI statement, US dollar-denominated borrowings continued to dominate India's external debt profile, accounting for 55.5% of the outstanding stock. This was followed by debt denominated in the Indian rupee (29.4%), the Japanese yen (6.4%), Special Drawing Rights (SDRs) (4.3%) and the euro (3.7%).

The statement further noted that while the general government's outstanding external debt declined, non-government external debt increased during FY26.

Loans remained the largest component of India's external debt at 34.7%, followed by currency and deposits (22.3%), trade credit and advances (19%), and debt securities (16.1%), the RBI said.

The annual external debt data offers a snapshot of India's external financing position and borrowing profile.