Spurred by Inclusion in global bond indexes such as the JP Morgan Government Bond Index-Emerging Markets (mid-2024) and the FTSE Russell Emerging Markets Government Bond Index (2025), India’s net debt inflows almost doubled to $76.8 billion in 2024, according to World Bank’s latest report on international debt.
Other reasons that contributed to this jump are Lower borrowing costs, strong investor appetite, and record levels of lending from financial institutions to Indian private entities.
India’s external debt stock rose by 10.6% in 2024 to $716.5 billion.
The report further shows that 77.3% of its long-term external debt is owed to private lenders, primarily bondholders and commercial banks. This marks a significant shift from the concessional and multilateral borrowing that still dominates in other South Asian IDA-eligible countries.
The report further noted that India’s government and private sector significantly increased bond issuance in 2024, taking advantage of favorable market conditions. This helped the country fund infrastructure projects, support fiscal needs, and refinance existing obligations—though at higher interest rates than in the pre-2020 era.
While India’s debt-to-GNI ratio remains moderate at 18.6%—and its debt-to-exports ratio at 82.1%—the picture is less rosy for some neighbours. Bhutan, Maldives, and Sri Lanka all have significantly higher debt burdens relative to the size of their economies. Sri Lanka, still recovering from the crisis, saw its debt service-to-exports ratio jump to 23.7% in 2024 as it cleared arrears. For India, the debt service-to-exports ratio is 19.5%.
As per the World Bank report, India’s ability to borrow extensively from international markets signals strong investor confidence and deep capital market integration. However, the reliance on private creditors—especially bonds—also exposes the economy to global financial conditions, exchange rate volatility, and shifts in investor sentiment.
With trade tensions rising and global uncertainty elevated, India’s debt servicing costs could climb if the rupee weakens or if global interest rates remain high.