India’s external debt rose to $647B in 2023: World Bank

• India’s external debt increased to $647 billion in 2023, with long-term debt stocks rising 7% to $498 billion, according to a World Bank report.

• The report also revealed that the country’s external debt made up 80% of its total exports, indicating the significant role of external borrowing in India’s economy.

• Furthermore, India saw net debt inflows of $33.42 billion and higher net equity inflows of $46.94 billion, reflecting strong foreign investor interest in the Indian market.

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India’s external debt rose by $31 billion

What’s the story

India’s external debt saw a sharp rise of $31 billion in 2023, amounting to $646.79 billion, according to the World Bank’s International Debt Statistics (IDS) report.

The report also noted a significant increase in interest payments from $15.08 billion in 2022 to $22.54 billion in 2023. This represents an increase of nearly 50% in just a year.

Long-term debt stocks rise

The World Bank report also highlighted changes in India’s long and short-term debt stocks.

The country’s long-term debt stocks rose 7% to $498 billion in 2023.

Meanwhile, short-term debt stocks witnessed a slight decline to $126.32 billion during the same period.

These changes suggest a move toward longer borrowing periods for the nation’s external obligations.

A look at external debt in terms of exports

The World Bank’s report also shed light on India’s external debt in terms of its exports.

In 2023, the external debt stock made up 80% of the country’s total exports. Meanwhile, debt servicing made up 10% of total exports in the same year.

These numbers highlight how much of an important role external borrowing plays in India’s economy.

Net debt and equity inflows in 2023

The World Bank’s IDS report also revealed India’s net debt and equity inflows for 2023.

The country saw net debt inflows of $33.42 billion during the period.

Notably, net equity inflows were much higher at $46.94 billion in the same year, reflecting strong interest from foreign investors in India’s market.

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