About External debt 

• External debt is the portion of a country’s debt that is borrowed from foreign lenders through commercial banks, governments, or international financial institutions.
• If a country cannot repay its external debt, it faces a debt crisis.If a nation fails to repay its external debt, it is said to be in sovereign default.
• India’s external debt includes Commercial Borrowings, Sovereign Borrowings, Non-Resident Deposits and Trade credits. 
• Foreign Direct Investments are not included in the external debt account.

Why in News?

• According to RBI’s latest data, India’s external debt rose to $620.7 billion at end-March 2022, recording an increase of $47.1 billion over the year earlier period.
• The external debt to GDP ratio declined to 19.9% at end-March 2022 from 21.2% a year earlier.
• U.S. dollar-denominated debt remained the largest component of India’s external debt, with a share of 53.2%.

Reference:

1. https://www.thehindu.com/business/indias-external-debt-rose-471-bn-to-6207-bn-in-fy22/article65586244.ece