India household debt rises to 45.5% of GDP
A central bank report flagged faster growth in non-housing retail loans even as the borrower mix shifts toward prime customers.
Mateo Fernandez ·
India’s household sector debt rose to 45.5% of GDP in September 2025, a central bank report said, as a surge in non-housing retail borrowing pushed consumption-led credit deeper into the system. Reaction pending.
RBI report flags non-housing retail loan surge
The report said non-housing retail loans have increased and now account for more than half of total household borrowings, indicating that consumption-linked credit is expanding faster than housing-related debt.
The central bank said borrower quality has improved, with a larger share of loans going to prime borrowers. That shift can temper near-term delinquency risk even as leverage rises.
The report also highlighted a risk around debt servicing for loans tied to depreciating assets, which can leave borrowers with weaker resale values relative to outstanding balances. It said India ranks fourth among emerging economies by household debt as a share of GDP.
The next scheduled signal on household credit conditions is expected with the central bank’s next financial stability report update; investors will watch for any change in stress indicators by September 30, 2026.