Mumbai: India''s external debt rose to $125.2 billion (€98.5 billion) with the addition of $2 billion (€1.6 billion) in net foreign loans during the fiscal year ended March 2006, an official statement said.

The country''s gross external debt stood at $123.2 billion (€96.9 billion) in the previous fiscal, up $11.6 billion (€9.1 billion) from fiscal 2003-04, the finance ministry said.

The lower level of accumulation of external debt in 2005-06 was attributed mainly to redemption of $5.5 billion (€4.3 billion) India Millennium Deposits by State Bank of India in December 2005.

The increase in debt stock during 2005-06 was mainly due to escalation in NRI deposits and surge in short-term credits, which were partially offset by contraction in commercial borrowings and bilateral loans.

Increased capital flows and surging exports also helped lessen the impact of debt accumulation, the ministry said, adding that the country''s external debt position compared well with other indebted countries.

India''s external debt formed 15.8 per cent of the country''s gross domestic product.