India's External Debt-To-GDP Ratio Rise Over 10%

2025-04-03 04:46:53

(MENAFN- KNN India) New Delhi, Apr 1 (KNN) India's external debt reached USD 717.9 billion by the end of December 2024, marking a 10.7 per cent increase from USD 648.7 billion in December 2023, according to the latest data from the Finance Ministry.

On a quarterly basis, the external debt rose by 0.7 per cent from USD 712.7 billion in September 2024. The external debt-to-GDP ratio stood at 19.1 per cent in December, compared to 19 per cent in the previous quarter.

A significant portion of this increase is attributed to valuation effects arising from the appreciation of the US dollar against the rupee and other major currencies, including the yen, euro, and Special Drawing Rights (SDR).

This valuation effect contributed an additional USD 12.7 billion to the external debt in the December quarter. Excluding this impact, the actual increase in external debt would have been USD 17.9 billion, a notable rise compared to the USD 5.2 billion increase recorded from September to December 2024.

The composition of India's external debt remained largely US dollar-denominated, accounting for 54.8 per cent of the total debt by December 2024. Other currency components included Indian Rupees, Japanese Yen, SDR, and the Euro.

While the central government's external debt declined, the non-government sector recorded an increase.

Non-financial corporations held the largest share of external debt at 36.5 per cent, followed by deposit-taking corporations (excluding the central bank) at 27.8 per cent, the central government at 22.1 per cent, and other financial corporations at 8.7 per cent.

Loans constituted the largest component of India's external debt at 33.6 per cent, followed by currency and deposits (23.1 per cent), trade credit and advances (18.8 per cent), and debt securities (16.8 per cent).

In terms of debt servicing, the ratio of principal repayments plus interest payments stood at 6.6 per cent of current receipts by December 2024, marginally lower than 6.7 per cent in September 2024.

(KNN Bureau)

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