India's External Debt Surges $31 Billion To $646.79 Billion In 2023: World Bank Report

India’s external debt surged by $31 billion in 2023, reaching $646.79 billion, according to the World Bank's International Debt Statistics (IDS) report.

This marks a significant uptick, reflecting the nation’s growing reliance on external borrowing.

Sharp Rise in Interest Payments

Interest payments on external debt climbed nearly 50 per cent, from $15.08 billion in 2022 to $22.54 billion in 2023.

Long-Term Debt Dominates

India’s long-term external debt—borrowed for periods exceeding one year—rose by 7 per cent to $498 billion, signalling a preference for more stable borrowing terms.

In contrast, short-term debt, which typically involves quicker repayment periods, declined slightly to $126.32 billion.

Debt-Export Ratio: A Key Indicator

The external debt stock accounted for 80 per cent of India’s total exports in 2023, while debt servicing—repayment of principal and interest—comprised 10 per cent of exports.

Net Inflows Highlight Investor Confidence

India witnessed net debt inflows of $33.42 billion in 2023, complemented by robust net equity inflows of $46.94 billion.

Equity inflows, representing foreign investment in Indian markets, indicate sustained global investor confidence in the country’s economic prospects.

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