Mumbai, Jun 27 (PTI) India's external debt increased by 10 per cent to USD 736.3 billion at the end of March 2025 compared to USD 668.8 billion in the year-ago period, the Reserve Bank said on Friday.

As a percentage of the GDP, the external debt increased to 19.1 per cent at the end of the recently concluded financial year from 18.5 per cent a year ago, it added.

In a year which saw some volatilities in the currency markets, the RBI said the "valuation effect" due to the appreciation of the US dollar against the rupee and other currencies amounted to USD 5.3 billion, while if one were to exclude the valuation effect, external debt would have increased by USD 72.9 billion instead of USD 67.5 billion in the year.

The overall debt included USD 261.7 billion of loans taken by non-financial corporations, USD 168.4 billion by the government and USD 202.1 billion by deposit-taking corporations, excluding the central bank, the RBI said.

At March-end 2025, long-term debt (with an original maturity of above one year) was USD 601.9 billion, an increase of USD 60.6 billion over the year.

The share of short-term debt (with original maturity of up to one year) in total external debt declined to 18.3 per cent at March-end 2025 from 19.1 per cent a year ago, but the ratio of short-term debt to foreign exchange reserves increased to 20.1 per cent in FY25 against 19.7 per cent at the end of March 2024.

US dollar-denominated debt remained the largest component of India's external debt with a share of 54.2 per cent at March-end 2025, followed by debt denominated in the rupee (31.1 per cent), yen (6.2 per cent), SDR2 (4.6 per cent), and euro (3.2 per cent), the RBI said.

Loans remained the largest component of external debt, with a share of 34 per cent, followed by currency and deposits (22.8 per cent), trade credit and advances (17.8 per cent) and debt securities (17.7 per cent). PTI AA BAL BAL

External debt rises, increasing long-term obligations and dollar exposure while valuation effects shape totals. External debt rose to USD 736.3 billion at end-March 2025, lifting the debt-to-GDP ratio to 19.1 per cent; a US dollar valuation effect partly explains the increase. Borrower composition is led by non-financial corporations, the government, and deposit-taking corporations. Long-term debt constitutes the majority while the share of short-term debt declined although the short-term debt to foreign exchange reserves ratio increased. Dollar-denominated liabilities are the largest currency exposure and loans are the largest instrument category.