India's Debt Edges Up, But Finances Hold Steady

India's external financial health demonstrated a slight improvement during the first quarter of fiscal year 2027, navigating global headwinds. As of the end of June 2026, the nation's external debt had increased by $15.4 billion, reaching a total of $778.2 billion.

Despite this rise, the debt-to-GDP ratio moderated to 20.8% from 20.9% at the close of March 2026. The gap between India's international liabilities and assets, while widening to $220.3 billion by the end of June from $204 billion three months prior, was still significantly lower than the $313 billion recorded a year ago.

Long-term debt, with maturities exceeding one year, accounted for $624.7 billion, an increase of $11.2 billion. Loans constituted the largest portion of external debt at 34.3%, followed by currency and deposits (22.2%) and trade credit (19.1%).

The US dollar remained the dominant currency in India's external liabilities, representing 54.8%, with the rupee at 29.8%. Valuation gains from the US dollar's appreciation against other currencies amounted to $0.9 billion. Excluding this effect, the external debt growth would have been $16.4 billion.

Invisible receipts, reflecting foreign exchange earnings from intangible services and investments, saw a rise to $163 billion in the first quarter compared to $144 billion in the same period last year. This indicates a strengthening of foreign exchange earnings.