**Executive Summary:**
This document presents the Ministry of Finance's response to questions regarding India's external debt. It provides details on the outstanding external debt at the end of FY 2024-25, its composition, and related financial indicators. The report includes data on debt instruments, long-term vs. short-term debt, and capital expenditure ratios.
**Key Points / Main Content:**
* **External Debt Overview:**
* India's external debt stood at USD 736.3 billion at the end of March 2025, a 10.1% increase from March 2024.
* The ratio of foreign exchange reserves to total external debt was 90.8%.
* The ratio of external debt to GDP was 19.1%.
* **Instrument-wise Profile (as of March 2025):**
* Special Drawing Rights allocations: USD 22.0 billion
* Currency and Deposits: USD 167.6 billion
* Debt Securities: USD 130.1 billion
* Loans: USD 250.6 billion
* Trade Credit and Advances: USD 131.2 billion
* Other Debt Liabilities: USD 0.0 billion
* Direct Investment: Intercompany Lending: USD 34.9 billion
* **Long-Term vs. Short-Term Debt (as of March 2025):**
* Long-term debt (original maturity): USD 601.9 billion (81.7% of total)
* Short-term debt (original maturity): USD 134.5 billion (18.3% of total)
* **Capital Expenditure to Fiscal Deficit Ratio:**
* Ratios for the last five fiscal years are:
* 2021-22: 37.4%
* 2022-23: 42.6%
* 2023-24: 57.4%
* 2024-25 (Provisional Actuals): 66.7%
* 2025-26 (Budget Estimates): 71.5%
* **Effective Capital Expenditure:**
* The ratio of effective capital expenditure to fiscal deficit (financed through borrowings) was 84% in 2024-25 (Provisional Actuals).
* Estimated to be 98.7% in 2025-26 (Budget Estimates).
**Impact Analysis:**
* **Central Government Ministries/Departments:**
* *Impact:* Directly responsible for managing capital expenditure (Capex) and Grant-in-Aid (GiA Capex).
* *Action Required:* Monitor and ensure effective capital expenditure within budgetary allocations.
* **State Governments and Other Grantee Bodies:**
* *Impact:* Recipients of Grant-in-Aid for asset creation.
* *Action Required:* Utilize GiA Capex effectively for asset creation and report on expenditure.
* **Reserve Bank of India (RBI):**
* *Impact:* Involved in monitoring and providing data related to external debt.
* *Action Required:* Continue to monitor and report on external debt and related indicators.
* **Ministry of Finance:**
* *Impact:* Responsible for overseeing external debt management and fiscal policy.
* *Action Required:* Ensure prudent management of external debt and maintain sustainable fiscal policies.
Key Entities Referenced
Ministry of Finance: The Indian government ministry responsible for economic affairs, including external debt management.
Lok Sabha: The lower house of the Parliament of India, where the unstarred question was raised.
Harsimrat Kaur Badal: The Member of Parliament who raised the unstarred question about external debt.
Pankaj Chaudhary: The Minister of State for Finance who provided the answer to the question about external debt.
Reserve Bank of India (RBI): The central bank of India, a source of data on external debt.
External debt: The total debt owed by India to foreign creditors. In March 2025, it stood at USD 736.3 billion.
Current Account Deficit: The shortfall between a country's income and expenditure.
Union Budget: The annual financial statement of the Government of India, a source of data on capital expenditure and fiscal deficit.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF ECONOMIC AFFAIRS
LOK SABHA
UNSTARRED QUESTION NO. 2382
TO BE ANSWERED ON 04.08.2025
EXTERNAL DEBT
2382. Smt. Harsimrat Kaur Badal:
Will the Minister of FINANCE be pleased to state:
(a) the details regarding outstanding amount of external debt owed by the country at the end of FY-
2024-25;
(b) whether there has been any changes in the percentage of the amount of external debt as compared
to FY-2023-24;
(c) the instrument-wise profile of the country's external debt;
(d) the share of long-term and short-term debt in the current debt;
(e) the ratio of capital expenditure to fiscal deficit during the last five years, including the current
year; and
(f) the percentage share of Capex (capital expenditure by the Government) and GiA Capex (Grant-in-
Aid provided to the State Governments and other grantee bodies for asset creation) in the capital
expenditure incurred out of the borrowed money?
ANSWER
THE MINISTER OF STATE FOR FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) and (b): External debt of any nation is associated with increasing investment and productivity.
India’s external debt outstanding as at the end of March 2025 stood at USD 736.3 billion, having
increased by 10.1 per cent from the levels as of March 2024. India has managed its external debt
prudently with the overarching objective of keeping the current account deficit within sustainable
limits. As of end-March 2025, the ratio of foreign exchange reserves to total external debt was 90.8,
and the ratio of external debt to GDP was 19.1 per cent. These debt vulnerability indicators are
benign and indicate that India’s external debt remains sustainable and prudently managed.
(c): The details on the instrument-wise profile of India's external debt as at end-March 2025 are
presented below:
Outstanding External Debt by Instruments as at end-March 2025
Instrument Amount (USD billion)
1. Special Drawing Rights (allocations) 22.0
2. Currency and Deposits 167.63. Debt Securities 130.1
4. Loans 250.6
5. Trade Credit and Advances 131.2
6. Other Debt Liabilities 0.0
7. Direct Investment: Intercompany Lending 34.9
Total External Debt 736.3
Sources: RBI; Ministry of Finance, GoI.
(d): The share of long-term and short-term external debt in total external debt, as at end March 2025
is presented below:
Long-term and Short-term External Debt as at the end March 2025
Item USD billion As per cent of Total External Debt
Long-term Debt (original maturity) @ 601.9 81.7
Short-term Debt (original maturity) # 134.5 18.3
@: Debt with original maturity of above one year.
#: Debt with original maturity of up to one year.
Source: RBI; Ministry of Finance, GoI.
(e): The ratio of capital expenditure to fiscal deficit of the Central Government, during the last five
years is presented below:
Financial Capital Fiscal Deficit Capital Expenditure/Fiscal
Year Expenditure Deficit (%)
(₹ crore) (₹ crore)
(a) (b) (a)/(b)
2021-22 592874 1584521 37.4
2022-23 740025 1737755 42.6
2023-24 949195 1654643 57.4
2024-25(PA) 1052007 1577270 66.7
2025-26 (BE) 1121090 1568936 71.5
Source: Union Budget and Controller General of Accounts
PA: Provisional Actuals
BE: Budget Estimates
*Fiscal deficit is financed through borrowing.
(f): Central Government incurs capital expenditure broadly through two routes, i.e. capital
expenditure by the Central Government Ministries/ Departments (Capex) and Grant-in-Aid provided
to the State Governments and other grantee bodies for asset creation (GiA Capex). Capex and GiA
Capex both taken together is referred to as effective capital expenditure. The ratio of effective capital
expenditure to fiscal deficit (which is financed through borrowings) was 84 per cent in 2024–25 (as
per Provisional Actuals) and is estimated to be 98.7 per cent in 2025–26 (as per Budget Estimates).
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