The total money a country owes to foreign creditors, including borrowings by the government, public sector, and private sector from non-residents and international institutions, denominated in foreign or domestic currency.
- It includes external commercial borrowings, NRI deposits, multilateral and bilateral loans, trade credit, and sovereign or corporate bonds held by non-residents.
- It is classified by maturity into short-term (up to one year) and long-term debt; a high short-term share is riskier because it must be rolled over or repaid quickly.
- Key indicators include the external-debt-to-GDP ratio, the debt-service ratio (debt repayments as a share of current receipts), and the ratio of foreign-exchange reserves to external debt.
- India's external debt is moderate by international standards, and reserves cover a large part of it; verify the latest figures from the RBI and the finance ministry.
- It links to the concept balance of payments, concept foreign exchange reserves, and external vulnerability.
The components, the short-term-versus-long-term split, and key ratios (debt-to-GDP, debt-service) are standard external-sector facts.
External debt (owed to foreigners) differs from internal or public debt (owed to domestic lenders); short-term external debt is the riskier part because of rollover pressure.
Money owed to foreign creditors; watch the short-term share, debt-to-GDP, and reserve cover; managed under the RBI and finance ministry.