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https://support.steampowered.com/kb_article.php?ref=7418-YUBN-8129
Important:
(snip)
It is not recommended that you install Steam to an external hard drive, due to potential performance issues.
I have steam installed on my PC but the game is being downloaded onto an external hard drive
So can you not try to install the game into your Steam directory on the drive that is internal and in your PC ? Is is that you don't have enough space there ?
If so, you should never almost or totally fill a hard drive up. That can cause other issues with the hard drive.
But this issue you have may not be drive related, actually. See this support page and be SURE you check everything linked in blue also.
Download Stalls At a Certain Percentage
https://support.steampowered.com/kb_article.php?ref=6966-IADH-1503&l=english
Also there, is this page, on using ethernet only to troubleshoot this.
https://support.steampowered.com/kb_article.php?ref=1456-EUDN-2493
Also, you can try changing download regions in your Steam settings to many different places and ones far away from you, to see if the region where you are trying to get the data from is maybe saturated or overloaded.
Steam in the top left of the client, then settings, then downloads. Change the region. Try to download again. Rinse and repeat.
Finally, try booting your computer into safe mode WITH networking. It MUST be with networking enabled in the boot options menu. See if you can download there in that safe boot after logging into your Steam account.
If you can, there is probably a program or process conflicting with Steam in normal Windows. See this....
https://support.steampowered.com/kb_article.php?ref=9828-SFLZ-9289
https://support.steampowered.com/kb_article.php?ref=3134-TIAL-4638
Hopefully this helps. But the external HDD may be the issue.