The foreign-owned assets in India increased by USD 22.9 billion over the previous quarter to USD 839.3 billion during the quarter ended June 2014, according to RBI.
This is mainly due to increase of USD 10.6 billion in portfolio investment in India and increase of USD 7.6 billion in direct investment into the country.
Among other investment liabilities, currency and deposits increased by USD 2.4 billion and loans (mainly external commercial borrowings) rose by USD 1.2 billion, according to Reserve Bank data on International Investment Position (IIP) for April-June.
The ratio of India’s international financial assets to international financial liabilities stood at 58.7 per cent in June 2014 (59.1 per cent in March 2014)
On the assets front, the Indian residents’ financial assets abroad stood at USD 492.8 billion, up USD 10.4 billion from previous quarter due to a rise of USD 11.9 billion in reserve assets.
The gap between assets and liabilities in this regard led to the rise in net claims of non-residents on India by USD 12.6 billion to USD 346.6 billion as of June 2014.
“This change in the net position reflected a USD 22.9 billion increase in the value of foreign-owned assets in India vis-à-vis a USD 10.4 billion increase in the value of Indian residents’ financial assets abroad,” RBI said.
The difference in assets and liabilities, reflected by the net International Investment Position (IIP), is disseminated with one quarter lag.
The IIP data is an important input for understanding external sustainability and vulnerability, and is also useful in analysing the economic structure.