Today, the Reserve Bank released data relating to India’s International Investment Position as at end-March 2020.

Key Features

I. Quarterly Variations (January-March, 2020):

• Net claims of non-residents on India lowered by US$ 45.8 billion to US$ 379.3 billion in March 2020 (Table 1).

• The decline in net foreign owned assets in India was due to a reduction of US$ 28.1 billion in the non-residents’ assets combined with an increase of US$ 17.7 billion in Indian residents’ foreign assets.

• Overseas assets of Indian residents’ rose mainly due to a surge of US$ 17.9 billion in reserve assets, supported by an increase in overseas direct investments even as other investments declined marginally during the quarter.

• The fall in foreign-owned assets was largely due to decline in portfolio and direct investments in India by US$ 20.1 billion and US$ 8.7 billion, respectively, even as loans availed by residents [mainly, external commercial borrowings (ECBs)] increased during the quarter; depreciation of the Indian rupee against the US dollar contributed to the decline in foreign-owned assets in India, when valued in US dollar terms.

• Reserve assets accounted for around two-thirds of total foreign assets (Table 3).

• The share of debt liabilities in total liabilities increased during the quarter (Table 4).

• The ratio of India’s international financial assets to international financial liabilities improved significantly to 65.4 per cent at end-March 2020 (62.1 per cent a quarter ago; 59.5 per cent a year ago).

II. Annual Variations (April-March, 2019-20)

• International financial assets of Indian residents increased by US$ 73.9 billion due to the rise in reserve assets and overseas direct investment by US$ 64.9 billion and US$ 13.0 billion, respectively, though other investments declined marginally during the year (Table 1).

• Despite a fall of US$ 13.7 billion in portfolio investment during the year, international financial liabilities increased by US$ 16.3 billion as direct investment and other investments rose by US$ 19.0 billion and US$ 11.0 billion, respectively.

• Overall, net claims of non-residents on India declined by US$ 57.6 billion during the year.

III. Ratio of International Financial Assets and Liabilities to GDP

• The ratio of overseas financial assets to India’s GDP in 2019-20 (at current market prices) moved up to 26.5 per cent in March 2020 (23.4 per cent a year ago) (Table 2).

• The ratio of total claims of non-residents to GDP increased to 40.5 per cent in March 2020 (39.3 per cent a year ago).

• The ratio of net IIP to GDP improved to (-)14.0 per cent as at end-March 2020 [(-)15.9 per cent].

(Yogesh Dayal)     
Chief General Manager

Press Release: 2019-2020/2571

¹India’s quarterly IIP is disseminated with a one- quarter lag. The IIP for end- December 2019 was placed in the public domain on March 31, 2020