India’s External Debt Increases to $778.2 Billion by June 2026 Quarter: RBI

India’s external debt increased to $778.2 billion at the end of June 2026, up $15.4 billion from March 2026, according to RBI data, as per news reports. The debt-to-GDP ratio, however, came down slightly to 20.8% from 20.9%. 

Debt with a maturity of more than one year accounted for most of the outstanding amount. Long-term debt rose by $11.2 billion during the quarter and stood at $624.7 billion. 

US Dollar Debt Remains the Largest Share 

More than half of India’s external debt was denominated in US dollars. The dollar accounted for 54.8% of the total, followed by the Indian rupee at 29.8%. 

The yen made up 6.9%, while SDR and euro-denominated debt accounted for 4.1% and 3.5%, respectively. 

Loans were also the largest category when the debt was split by instrument, with a 34.3% share. Currency and deposits stood at 22.2%, trade credit and advances at 19.1%, and debt securities at 16.5%. 

Short-Term Debt Takes a Slightly Higher Share 

Short-term debt accounted for 19.7% of total external debt in June, compared with 19.6% in March. Its ratio to foreign exchange reserves increased more noticeably, from 21.6% to 23%. 

The RBI also reported an increase in outstanding debt across both government and non-government sectors. 

Currency Movements Reduced the Increase 

The change in the debt figure was partly affected by currency movements during the quarter. According to the RBI, valuation gains from the US dollar’s appreciation against the yen and euro came to $0.9 billion. 

Without this valuation effect, the increase in external debt would have been $16.4 billion during the quarter. 

Debt Service Ratio Holds At 5.6% 

The debt service ratio was unchanged at 5.6% of current receipts at the end of June. It was at the same level three months earlier. 

Read More: Government Reduces Windfall Tax on Diesel and ATF; Petrol Duty Unchanged! 

Conclusion 

India’s external debt was higher at the end of June, although its ratio to GDP edged down during the quarter. Long-term debt continued to account for the bulk of the total, while short-term debt made up a slightly larger share than in March. 

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