India’s external debt rose to $778.2 billion at the end of June 2026, the Reserve Bank of India said in data released around Wednesday, reflecting higher overseas borrowings by the government and the commercial sector amid a stronger dollar and elevated global yields.
What drove the increase
RBI figures show the stock of external debt climbed from the previous quarter as long-term borrowings and non-resident deposits contributed to the rise. Valuation effects from the US dollar’s strength against the rupee also lifted the dollar value of outstanding liabilities. Debt denominated in dollars remains the largest currency share of the stock, followed by other major currencies.
Economists said the absolute rise needs to be read against India’s foreign-exchange reserves and GDP. Ratios such as debt-to-GDP and short-term debt to reserves will matter more for ratings and investor comfort than the headline dollar figure alone — especially while FIIs continue to sell equities, as seen in our market selloff coverage.
Link to oil, yields and the RBI
Higher crude near $103 and firm US Treasury yields have kept emerging-market borrowing costs elevated through September. That backdrop feeds into October MPC debates on whether to hike rates to anchor inflation expectations; see our report on RBI hike odds.
Investor takeaway
External debt at $778.2 billion is a monitoring point, not an immediate crisis signal, provided reserves stay ample and short-term rollover risk remains contained. Full tables are in the RBI release summarised by The Economic Times.
This report is for information only and is not investment advice.
Today’s News 30 Sep 2026 · 10 stories
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