With reference to India's external debt and trade data, consider the following statements: 1. India's external debt reached $778.2 billion by end-June. 2. August services trade exports were $35.5 billion. 3. The debt-to-GDP ratio stood at 25.8% by end-June. Which of the statements given above is/are correct?

India's external debt rose $15.4 billion to $778.2 billion by end-June

GS3Economy · S&T · Environment · Security· Growth, inflation & macro indicators· Prelims· 1 October 2026

External debt and debt-to-GDP ratio: a key GS3 indicator for macroeconomic stability.

Why in news

The RBI released data showing India's external debt reached $778.2 billion by end-June, reflecting a rise of $15.4 billion.

Background

India's external debt stood at $778.2 billion by end-June with a debt-to-GDP ratio of 20.8%. Net claims of non-residents rose to $220.3 billion, while August services trade exports reached $35.5 billion against $18.9 billion in imports.

Facts for Prelims

FactIndia's external debt reached $778.2 billion by end-June.
FactIndia's debt-to-GDP ratio moderated to 20.8%.
FactNet claims of non-residents rose to $220.3 billion.
FactAugust services trade exports were $35.5 billion against $18.9 billion imports.
BodyRBI (Reserve Bank of India) is the body that released the debt data.

Prelims practice question

With reference to India's external debt and trade data, consider the following statements:

India's external debt reached $778.2 billion by end-June.
August services trade exports were $35.5 billion.
The debt-to-GDP ratio stood at 25.8% by end-June.

Which of the statements given above is/are correct?

(a)1 only
(b)3 only
(c)1 and 2 only
(d)1 and 3 only

Show answer

Answer: (c) 1 and 2 only — Statements 1 and 2 are correct. Statement 3 is incorrect: The debt-to-GDP ratio moderated to 20.8%.

For Mains

Q. Analyze the factors influencing India's external debt profile and its implications for macroeconomic stability and the current account balance.

Dimensions to cover in your answer

Debt sustainability: Impact of debt-to-GDP ratio on fiscal space and sovereign credit ratings
Trade imbalance: Structural shift towards services exports to offset merchandise trade deficits
Capital flow dynamics: Volatility in foreign-owned assets versus net claims of non-residents

Keywords: External Debt · Debt-to-GDP Ratio · Current Account Balance · Services Trade · Macroeconomic Stability

Read the full news →Report a mistake in this note Source: Economic Times ↗

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