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India's Interest Bill to Triple Over a Decade This Fiscal Year
Mint Ahmedabad
|August 23, 2025
Pandemic-era costly loans keep repayment burden high despite soft bond yields since FY24
India's interest payments on outstanding debt have nearly tripled over the past decade and are projected to increase to ₹12.76 trillion this financial year ending March, according to finance ministry data.
The surge reflects elevated borrowing costs as the government has continued to service loans contracted at higher rates, especially during the pandemic years, despite a moderation in bond yields since FY24.
"The repayment profile of government securities has added to the rise, with a share of bonds issued earlier now coming up for servicing, thus keeping the repayment costs high during FY26," an official aware of the matter said, requesting anonymity.
A sizeable stock of medium- and long-term government bonds is set to mature in the coming years. To address this, the government has ramped up borrowing across major tenors and is actively executing buybacks and switches, the official added.
This story is from the August 23, 2025 edition of Mint Ahmedabad.
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