At the beginning of the 80s when the debt crisis became evident with the insolvency declarations of Mexico, Brasil and other developing countries, India was considered as an unproblematical and reliable debtor nation. India’s total external debt as well as the external debt in relation to GNP was low, especially compared to highly indebted countries in Latin Amercia. India still had a positive reputation due to regular repayments of credit and interest services. However, at the end of the 80s, the situation of indebtedness in India changed dramatically. The external debt presently amounts to more than 70 billion US-$. Now India is the third largest debtor nation of the Third World after Mexico and Brasil. Considerable internal debt has also definitely aggravated India’s debt problem. The economic consequences are manifold and it is becoming increasingly evident that especially the poor population suffers greatly from this situation.