MUMBAI: With an external debt stock of $746 billion as of September 2025, up from $736.3 billion as of March 2025, the country ranks the 20th globally and 10th among the G20 nations, but accounts for only 0.69% of the global external debt of $104.4 trillion, says the economic survey.
On the other hand the worlds’ external debt continued to rise and stood at $104.4 trillion as of December 2024, up 1.4% from a year earlier, amid tight global financial conditions and elevated policy rates. Advanced economies accounted for as much as 88.1% or $92 trillion of the total, while emerging economies recorded a faster expansion, with external debt rising to $12.4 trillion.
Significantly, the little European nation Luxembourg, which has one of the highest per capita incomea, has an external debt to GDP ratio of 4012.6, being the most outlier among advanced economies.
“Globally the country ranks 2oth and 11th within the G20 as of September 2025 with an external debt stock of $746 billion as of September 2025, up from $736.3 billion as of March 2025. The same was only $718.2 billion, as of December 2024, up 10.7% increase on-year,” the survey said.
However, the survey was quick to add that “despite this expansion, the country remains modestly leveraged, with an external debt-to-GDP ratio of 18.4%, well below that of many large economies. Accordingly, the country accounts for only 0.69% of global external debt, underscoring its relatively small contribution to global indebtedness.”
The country’s external debt-to-GDP ratio has remained broadly stable, averaging around 20.2% over the last decade (March 2016 to March 2025). Another key factor is that external debt constitutes less than 5% of the government’s total debt, which mitigates the external sector risks.
Trade, investment and capital flows are increasingly influenced by geopolitical alignments, industrial policy and strategic considerations, implying that the external environment is likely to remain volatile and less supportive than during the earlier phase of hyper-globalisation, the survey said.
“For emerging market economies, this shift entails greater competition for capital, slower expansion of global trade volumes and heightened sensitivity of external flows to policy and geopolitical developments,” it added.
“External sector remains strong, with deepening global integration driven by robust exports, resilient services trade, and expanding trade networks. This reflects increased competitiveness, diversification, and adaptability to global demand. Services exports lead, while non-petroleum merchandise exports hit record levels, showcasing growth in high-value manufacturing and knowledge trade. This strength is supported by healthy foreign exchange reserves and a moderate external debt profile,” the survey concludes.