India's external debt rises to USD 682.3 billion by June 2024

India's external debt reached USD 682.3 billion by the end of June 2024, marking a 2% increase from March 2024 and an 8.5% rise compared to the previous year, as reported by the Reserve Bank of India. Despite this, the external debt-to-GDP ratio remained stable at 18.8%, slightly down from 18.9% in March 2024, indicating effective management of debt relative to the country's economic output.

A significant factor in the debt increase was the appreciation of the US dollar against the Indian rupee and other major global currencies such as the yen, euro, and SDR. This currency movement added USD 3.0 billion to the total debt during the quarter. Without this valuation effect, the debt increase would have been higher, totaling USD 16.3 billion instead of USD 13.3 billion during the same period. India's debt servicing obligations, including principal and interest payments, showed a slight improvement, standing at 6.6% of current receipts as of June 2024, compared to 6.7% at the end of March 2024.

Long-term external debt, defined as debt with an original maturity of more than one year, increased by USD 8.2 billion, reaching USD 549.6 billion by June 2024, representing a 1.5% rise. Short-term debt, with a maturity of up to one year, also grew, making up 19.4% of the total external debt at the end of June, up from 19.1% in March 2024. The ratio of short-term debt to foreign exchange reserves slightly increased to 20.3% from 19.7% in the previous quarter.

Most of India's external debt was in US dollars, comprising 54.6 percent of the total. Indian rupee debt made up 31.2 percent, while yen-denominated debt constituted 5.4 percent, SDR 5.1 percent, and euro-denominated debt 2.9 percent.