India's external debt reached $663.8 billion in Q1 FY25, with 53.4% being government debt and 46.6% non-government debt. Commercial borrowings constitute the largest component at 38.2%, followed by non-resident deposits at 23.7%. The debt-to-GDP ratio stands at 19% as of March 2024. RBI monitors external debt through quarterly surveys, DSA framework, and risk indicators like debt service ratio. Short-term debt comprises 19.8% of total external debt, indicating manageable liquidity risk.

External debt represents India's borrowing from foreign creditors, crucial for financing development while maintaining macroeconomic stability. The composition reflects India's financing strategy - commercial borrowings fund infrastructure projects, while NRI deposits provide stable forex inflows. RBI's monitoring framework ensures debt sustainability through early warning indicators like debt-to-GDP ratio, debt service ratio, and foreign exchange adequacy. The 19% debt-to-GDP ratio remains comfortable compared to emerging market peers, but rising interest rates globally pose refinancing challenges. Government debt includes multilateral borrowings from World Bank and ADB, while non-government debt comprises corporate external commercial borrowings and trade credits. RBI's quarterly External Debt Statistics report tracks maturity profiles, currency composition, and sectoral distribution. The central bank uses Debt Sustainability Analysis to assess future debt dynamics under various scenarios. Key risks include currency depreciation increasing rupee debt burden, global liquidity tightening affecting rollover, and concentration in short-term debt creating refinancing pressure. India's external debt management balances growth financing needs with prudential limits to maintain investor confidence and sovereign rating stability.