Today, the Reserve Bank released data relating to India’s International Investment Position for end-March 2022[1]. Key Features of India’s IIP in end-March 2022 Quarterly Variations: -
Net claims of non-residents on India increased by US$ 5.6 billion during Q4:2021-22 to US$ 359.8 billion in March 2022. -
This rise in net claims was due to larger decline in the Indian residents’ overseas financial assets [US$ (-)7.3 billion] when compared to the decline in foreign-owned assets in India [US$ (-)1.7 billion] (Table 1). -
Foreign assets of Indian residents declined during Q4:20221-22, mainly due to a decrease of US$ 26.3 billion in reserve assets even as direct, portfolio and other investments, such as, trade credit and currency and deposits increased during the period. -
Even though reserve assets declined during the quarter, it accounted for around two thirds of India’s international financial assets (Table 3). -
The decline in India’s foreign liabilities during the quarter is attributed to reduction in portfolio investment as well as currency and deposits. -
Variation in the exchange rate of rupee vis-a-vis other currencies had a significant impact on the change in liabilities, when valued in US$ terms, as the rupee depreciated by 2.02 per cent during the quarter. -
The share of debt liabilities in total external liabilities increased marginally to 49.2 per cent as at end-March 2022 from 48.5 per cent a quarter ago (Table 4). Annual Variations -
During 2021-22, non-residents’ net claims on India increased by US$ 4.6 billion: increase in foreign owned assets in India (US$ 65.8 billion) exceeded the rise in overseas assets of Indian residents (US$ 61.1 billion) (Table 1). -
International financial assets of Indian residents increased primarily due to increase in reserve assets (US$ 30.3 billion), direct investment (US$ 17.7 billion) and trade credits (US$ 13.0 billion). -
In spite of a decline of US$ 16.1 billion in portfolio investment during the financial year, international financial liabilities increased on the back of large rise in direct investment in India (US$ 39.6 billion) and other investments (US$ 42.4 billion). -
Variation in the exchange rate of rupee vis-a-vis other currencies affected change in liabilities, when valued in US$ terms. -
The ratio of India’s international financial assets to international financial liabilities increased to 71.9 per cent in March 2022 from 70.8 per cent a year ago. Ratio of International Financial Assets and Liabilities to GDP (at current prices): -
As a ratio to GDP at current market prices, India’s reserve assets, residents’ financial assets as well as claims of non-residents on India declined during 2021-22 (Table 2). -
The ratio of net claims of non-residents on India to nominal GDP improved to (-)11.6 per cent in March 2022 from (-)13.2 per cent a year ago. (Yogesh Dayal) Chief General Manager Press Release: 2022-2023/451 Table 1: Overall International Investment Position of India | (US$ billion) | Period | Mar-21 (PR) | Jun-21 (PR) | Sep-21 (PR) | Dec-21 (PR) | Mar-22 (P) | Net IIP (A-B) | -355.2 | -330.8 | -335.6 | -354.2 | -359.8 | A. Assets | 859.5 | 895.4 | 932.3 | 927.9 | 920.6 | 1. Direct Investment | 193.9 | 199.6 | 203.8 | 208.1 | 211.6 | 1.1 Equity and investment fund shares | 122.7 | 125.6 | 128.1 | 130.9 | 132.8 | 1.2 Debt instruments | 71.2 | 74.1 | 75.8 | 77.2 | 78.8 | 2. Portfolio Investment | 7.9 | 7.9 | 8.6 | 9.7 | 10.6 | 2.1 Equity and investment fund shares | 2.3 | 3.1 | 4.6 | 6.1 | 1.1 | 2.2 Debt Securities | 5.6 | 4.8 | 4.0 | 3.6 | 9.5 | 3. Other Investment | 80.6 | 76.8 | 84.5 | 76.5 | 91.1 | 3.1 Trade Credits | 5.6 | 7.9 | 11.8 | 12.9 | 18.6 | 3.2 Loans | 13.3 | 13.6 | 10.8 | 8.9 | 10.5 | 3.3 Currency and Deposits | 42.4 | 35.9 | 42.3 | 34.8 | 42.1 | 3.4 Other Assets | 19.2 | 19.4 | 19.6 | 19.9 | 19.9 | 4. Reserve Assets | 577.0 | 611.1 | 635.4 | 633.6 | 607.3 | B. Liabilities | 1,214.6 | 1,226.2 | 1,267.8 | 1,282.1 | 1,280.4 | 1. Direct Investment | 482.1 | 493.7 | 506.7 | 514.2 | 521.7 | 1.1 Equity and investment fund shares | 456.9 | 468.0 | 480.7 | 487.9 | 494.0 | 1.2 Debt instruments | 25.2 | 25.7 | 26.0 | 26.3 | 27.7 | 2. Portfolio Investment | 278.5 | 277.8 | 282.6 | 277.1 | 262.4 | 2.1 Equity and investment fund shares | 177.3 | 176.2 | 177.0 | 172.8 | 156.4 | 2.2 Debt securities | 101.2 | 101.6 | 105.5 | 104.3 | 106.0 | 3. Other Investment | 454.0 | 454.7 | 478.5 | 490.8 | 496.4 | 3.1 Trade Credits | 100.3 | 102.1 | 104.4 | 113.5 | 118.2 | 3.2 Loans | 197.5 | 197.2 | 201.2 | 204.1 | 205.0 | 3.3 Currency and Deposits | 143.8 | 143.1 | 142.9 | 143.5 | 141.0 | 3.4 Other Liabilities | 12.4 | 12.3 | 30.0 | 29.8 | 32.2 | Memo item: Assets to Liability Ratio (%) | 70.8 | 73.0 | 73.5 | 72.4 | 71.9 | PR: Partially revised; P: Provisional; The sum of the constituent items may not add to the total due to rounding off. | Table 2: Ratios of External Financial Assets and Liabilities to GDP | (per cent) | Period | Mar-20 (R) | Mar-21 (PR) | Mar-22 (P) | Net IIP (Assets - Liabilities) | -14.1 | -13.2 | -11.6 | A. Assets | 26.9 | 31.8 | 29.4 | 1. Direct Investment | 6.9 | 7.2 | 6.8 | 1.1 Equity and investment fund shares | 4.5 | 4.6 | 4.3 | 1.2 Debt instruments | 2.4 | 2.6 | 2.5 | 2. Portfolio Investment | 0.1 | 0.3 | 0.3 | 2.1 Equity and investment fund shares | - | 0.1 | - | 2.2 Debt Securities | 0.1 | 0.2 | 0.3 | 3. Other Investment | 2.0 | 3.0 | 2.9 | 3.1 Trade Credits | - | 0.2 | 0.6 | 3.2 Loans | 0.3 | 0.5 | 0.3 | 3.3 Currency and Deposits | 1.0 | 1.6 | 1.3 | 3.4 Other Assets | 0.7 | 0.7 | 0.6 | 4. Reserve Assets | 17.9 | 21.3 | 19.4 | B. Liabilities | 41.0 | 45.0 | 41.0 | 1. Direct Investment | 15.7 | 17.9 | 16.7 | 1.1 Equity and investment fund shares | 14.8 | 17.0 | 15.8 | 1.2 Debt instruments | 0.9 | 0.9 | 0.9 | 2. Portfolio Investment | 8.8 | 10.3 | 8.4 | 2.1 Equity and investment fund shares | 5.1 | 6.6 | 5.0 | 2.2 Debt securities | 3.7 | 3.8 | 3.4 | 3. Other Investment | 16.5 | 16.8 | 15.9 | 3.1 Trade Credits | 3.9 | 3.7 | 3.8 | 3.2 Loans | 7.3 | 7.3 | 6.6 | 3.3 Currency and Deposits | 5.0 | 5.3 | 4.5 | 3.4 Other Liabilities | 0.3 | 0.5 | 1.0 | Note: - Negligible R: Revised; PR: Partially revised; P: Provisional; | Table 3: Composition of International Financial Assets and Liabilities of India | (per cent) | Period | Mar-21 (PR) | Jun-21 (PR) | Sep-21 (PR) | Dec-21 (PR) | Mar-22 (P) | A. Assets | | | | | | 1. Direct Investment | 22.6 | 22.3 | 21.9 | 22.4 | 23.0 | 2. Portfolio Investment | 0.9 | 0.9 | 0.9 | 1.1 | 1.1 | 3. Other Investment | 9.4 | 8.6 | 9.1 | 8.2 | 9.9 | 4. Reserve Assets | 67.1 | 68.2 | 68.1 | 68.3 | 66.0 | Assets/Liabilities | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | B. Liabilities | 1. Direct Investment | 39.7 | 40.3 | 40.0 | 40.1 | 40.7 | 2. Portfolio Investment | 22.9 | 22.6 | 22.3 | 21.6 | 20.5 | 3. Other Investment | 37.4 | 37.1 | 37.7 | 38.3 | 38.8 | Table 4: Share of External Debt and Non-Debt Liabilities of India | (per cent) | Period | Mar-21 (PR) | Jun-21 (PR) | Sep-21 (PR) | Dec-21 (PR) | Mar-22 (P) | Non-Debt Liabilities | 52.2 | 52.5 | 51.9 | 51.5 | 50.8 | Debt Liabilities | 47.8 | 47.5 | 48.1 | 48.5 | 49.2 | Total | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 |
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