India's Lenders: Which Countries Have Given Loans To India? World Bank Report Insights

India's external debt has surged by $31 billion, reaching a total of $646.79 billion in 2023, according to the World Bank's International Debt Report. The rise in external debt marks a significant increase compared to the previous year, reflecting higher borrowing by the country. The report further highlights that India’s interest payments on external debt have also risen substantially, from $15.08 billion in 2022 to $ 22.54 billion in 2023. This increase in interest costs is indicative of the growing financial burden on the country due to its rising debt obligations.

In terms of debt composition, long-term debt stocks have seen a 7 per cent increase, amounting to $498 billion in 2023. Meanwhile, short-term debt stocks experienced a slight decline, falling to $126.32 billion. Despite the rise in overall external debt, the report notes that external debt as a percentage of India's exports stood at 80 per cent, while the debt servicing ratio was 10 per cent of exports in 2023. The World Bank also provided insights into the country’s foreign capital inflows for the year. According to the report, India received net debt inflows of $33.42 billion, while net equity inflows were higher at $46.94 billion. These inflows demonstrate strong investor confidence in India's economy, even as the country grapples with rising external debt.

While the increase in external debt is a concern, the country's foreign exchange reserves and ongoing economic growth are likely to help manage the rising debt burden. The data reflects India’s growing reliance on foreign borrowing, but also its capacity to attract significant foreign equity investment.

Top Lenders of India
Talking about top lending countries to India, Japan constitutes 11 per cent of India’s debt followed by Russia and Germany both constituting 2 per cent of India’s debt profile. When it comes to multilaterals, ADB constitutes 11 per cent, World Bank IRBD makes up 11 per cent of the total debt profile.