India’s external debt rose to $730 billion by the end of FY 2024-25

Current Context: The India’s External Debt: A Status Report 2024‑25 was released by the Ministry of Finance (Department of Economic Affairs) in coordination with RBI on 9 September 2025, presenting the position as of end‑March 2025.

• The report showed that India’s external debt rose to $730 billion, up from $660 billion in the previous year, marking a 10% increase.
• The debt‑to‑GDP ratio stood at 19.1%, while forex reserves provided a strong buffer, covering 90.8% of the debt.
• Long‑term debt accounted for 81.7%, with short‑term debt at 18.3%, largely trade credit.
• Commercial lenders (39.6%) and NRI deposits (22.4%) were the largest creditors, while non‑financial corporations were the top borrowers.
• The US dollar remained the dominant currency (54.2%), followed by the Indian rupee (31.1%).
• Despite the rise, the government described India’s external debt position as modest and sustainable compared to other developing economies.

Question:

Q.1 As per India’s External Debt: A Status Report 2024-25, what was India’s debt-to-GDP ratio at end-March 2025?
a) 15.5%
b) 17.8%
c) 19.1%
d) 21.4%

Answer: c) The debt‑to‑GDP ratio stood at 19.1%, while forex reserves provided a strong buffer, covering 90.8% of the debt.