Will India ever pay off her external debt?

Question:

Will India ever pay off her external debt?

Debt

Debt is the money that is borrowed by a person today to be paid at a later date. External debt of a country means the total debt the country owes to foreign creditors. It includes money owed to international financial institutions, foreign governments, etc.

Answer and Explanation:

Yes, India can definitely pay off her external debt as it has the capacity to do so but India will not do so now as India needs more capital to be invested now as India is in the developing stage. If India pays off her external debt now, It will be debt-free but development will go down. Also, most of the foreign debt is loaned to us by various countries for specific purposes, which is an integral part of diplomatic relations building.


Learn more about this topic:

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Long-Term Debt: Definition, Cost & Formula

from Financial Accounting: Help and Review

Chapter 8 / Lesson 7
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