At the end of December 2024, India’s external debt rose to USD 717.9 billion (bn), marking a 10.7% increase from USD 648.7 billion in December 2023 as per according to ‘India’s Quarterly External Debt Report’ released by the Ministry of Finance(MoF).
- The external debt increased by 0.7% on a quarterly basis, reaching USD 712.7 billion in September 2024. By December 2024, the external debt-to- Gross Domestic Product(GDP) ratio was 19.1%, slightly up from 19% in the previous quarter.
Long-term and Short-term Debt:
i.The long-term debt (with an original maturity of above one year) at the end of December 2024 was at USD 578.3 bn, recording a marginal increase of USD 0.2 bn over its level at end of September 2024.
ii.The share of short-term debt (with original maturity of up to one year) in total external debt increased to 19.4% at end of December 2024 from 18.9% at end of September 2024.
Valuation Effect:
The valuation effect due to the appreciation of the US dollar vis-a-vis the rupee and other major currencies, such as the yen, the euro and Special Drawing Rights (SDR), amounted to USD 12.7 bn during the quarter ended December 2024.
- When the valuation effect is excluded, the increase in external debt would have been USD 17.9 bn instead of USD 5.2 bn at end of December 2024 over September 2024.
- USD denominated debt remained the largest component of India’s external debt, with a share of 54.8% at end of December 2024, followed by Indian Rupee (30.6%), Japanese Yen (6.1%), SDR (4.7%) and Euro (3.0%).
Changes in External Debt Distribution:
The central government’s external debt saw a decline, the non-government sector experienced an increase.
i.Among the non-government sectors, non-financial corporations held the largest share at 36.5%, followed by deposit-taking corporations (excluding the central bank) at 27.8%. The central government accounted for 22.1%, and other financial corporations held 8.7%.
ii.In terms of the composition of external debt, loans represented the largest share at 33.6%, followed by currency and deposits at 23.1%, trade credit and advances at 18.8%, and debt securities at 16.8%.
iii.Regarding debt servicing, the ratio of principal repayments and interest payments to current receipts stood at 6.6% by December 2024, slightly lower than 6.7% in September 2024.
About Ministry of Finance(MoF):
Union Minister– Nirmala Sitharaman (Rajya Sabha- Karnataka)
Minister of State(MoS) – Pankaj Chaudhary (Constituency- Maharajganj, Uttar Pradesh, UP)
