India’s external debt surged by around 11% at the end of December 2024 compared to the same period in the previous fiscal year. The debt increased from approximately $648 billion at the end of December 2023 to about $718 billion at the end of December 2024 – an increase of over $69 billion (10.7%).
Composition of the Debt
- Sectoral Distribution:
- Non-Financial Corporations: These entities hold the largest share of the external debt, suggesting that favorable foreign interest rates are encouraging more borrowing to fund corporate needs and infrastructure projects.
- General Government: Notably, the outstanding external debt of the general government declined. This category includes external assistance, defence debt, investments in Treasury Bills/government securities by foreign portfolio investors, foreign central banks, international institutions, and SDR allocations by the IMF.
- Maturity Profile:
- Long-Term Debt:
Debt with an original maturity of above one year stood at over $578 billion by the end of December 2024. - Short-Term Debt:
The share of debt with an original maturity of up to one year increased to 19.4% at the end of December 2024, up from 18.9% at the end of September 2024.
- Long-Term Debt:
Currency Denomination Debt
- Breakdown by Currency:
- US Dollar: 54.8%
- Indian Rupee: 30.6%
- Japanese Yen: 6.1%
- SDR: 4.7%
- Euro: 3%
Components of the Debt
- Major Components:
- Loans: 33.6% of the total external debt
- Currency and Deposits: 23.1%
- Trade Credit and Advances: 18.8%
- Debt Securities: 16.8%
(Source: BL)
