Today, the Reserve Bank released data relating to India’s International Investment Position as at end-March 2021. Key Features of India’s IIP in March 2021 I. Quarterly Variations: -
Net claims of non-residents on India increased by US$ 11.2 billion during Q4:2020-21 to US$ 352.7 billion in March 2021 (Table 1). -
The increase in net claims was due to larger increase in foreign-owned assets in India (US$ 17.9 billion) vis-à-vis the overseas financial assets of Indian residents (US$ 6.7 billion) during the quarter. -
Indian residents’ overseas financial assets abroad increased largely on the back the increase in overseas direct investment as well as currency and deposits. -
Inward portfolio investment and loans were major contributors to the rise in India’s foreign liabilities. -
Depreciation of the Indian rupee against the US dollar during the quarter contributed to changes in India’s liabilities, when valued in the US dollar terms. -
Reserve assets accounted for over two-thirds of India’s international financial assets (Table 3). -
Non-debt liabilities had 52.4 per cent share in India’s external liabilities (Table 4). II. Annual Variations: -
During 2020-21, non-residents’ net claims on India reduced by US $ 22.7 billion: increase in overseas assets of Indian residents (US$ 141.2 billion) exceeded the rise in foreign owned assets in India (US$ 118.5 billion) (Table 1). -
The increase in international financial assets of Indian residents was led by a large accretion of US$ 99.2 billion in reserve assets; overseas direct investment and currency and deposits were the other major components. -
Inward direct investment and portfolio equity investment together accounted for nearly 90 per cent of the increase in international financial liabilities during 2020-21. -
The ratio of India’s international financial assets to international financial liabilities increased to 70.9 per cent in March 2021 from 65.6 per cent a year ago. III. Ratio of International Financial Assets and Liabilities to GDP (at current prices): -
The ratios of reserve assets, Indian residents’ overseas financial assets and claims of non-residents on India to GDP at current market prices surged during 2020-21, largely due to the decline in GDP during the year, caused by the COVID-19 pandemic (Table 2). -
The ratio of net IIP of India to GDP also improved to (-) 13.1 per cent in March 2021 from (-) 13.9 per cent a year ago. (Yogesh Dayal) Chief General Manager Press Release: 2021-2022/457 Table 1: Overall International Investment Position of India | (US $ billion) | Period | Mar-20(R) | Jun-20(PR) | Sep-20(PR) | Dec-20(PR) | Mar-21(P) | Net IIP | -375.4 | -344.6 | -337.9 | -341.5 | -352.7 | A. Assets | 717.0 | 749.2 | 802.8 | 851.5 | 858.2 | 1. Direct Investment | 183.0 | 185.6 | 188.2 | 190.9 | 193.9 | 2. Portfolio Investment | 3.8 | 4.3 | 5.0 | 5.5 | 6.4 | 2.1 Equity Securities | 0.6 | 0.8 | 1.9 | 1.7 | 0.8 | 2.2 Debt Securities | 3.2 | 3.5 | 3.1 | 3.8 | 5.6 | 3. Other Investment | 52.4 | 53.6 | 64.8 | 69.3 | 80.9 | 3.1 Trade Credits | 1.5 | 1.1 | 2.8 | 3.2 | 5.6 | 3.2 Loans | 6.7 | 7.5 | 9.0 | 10.6 | 13.3 | 3.3 Currency and Deposits | 26.0 | 27.8 | 34.9 | 37.3 | 42.4 | 3.4 Other Assets | 18.2 | 17.2 | 18.1 | 18.2 | 19.6 | 4. Reserve Assets | 477.8 | 505.7 | 544.7 | 585.8 | 577.0 | B. Liabilities | 1,092.4 | 1,093.8 | 1,140.7 | 1,193.0 | 1,210.9 | 1. Direct Investment | 418.2 | 419.4 | 456.0 | 480.2 | 482.2 | 2. Portfolio Investment | 246.7 | 241.6 | 253.3 | 274.0 | 281.8 | 2.1 Equity Securities | 134.8 | 139.0 | 149.1 | 170.6 | 177.3 | 2.2 Debt securities | 111.9 | 102.6 | 104.2 | 103.4 | 104.5 | 3. Other Investment | 427.5 | 432.8 | 431.4 | 438.8 | 446.9 | 3.1 Trade Credits | 104.3 | 104.0 | 102.2 | 102.6 | 100.3 | 3.2 Loans | 179.8 | 184.9 | 180.9 | 184.0 | 190.4 | 3.3 Currency and Deposits | 130.8 | 132.9 | 137.5 | 140.7 | 142.1 | 3.4 Other Liabilities | 12.6 | 11.0 | 10.8 | 11.5 | 14.1 | Memo item: Assets to Liability Ratio (%) | 65.6 | 68.5 | 70.4 | 71.4 | 70.9 | R: Revised; 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-19 (R) | Mar-20 (PR) | Mar-21 (P) | Net IIP (Assets - Liabilities) | -16.0 | -13.9 | -13.1 | A. Assets | 23.5 | 26.5 | 31.8 | 1. Direct Investment Abroad | 6.2 | 6.8 | 7.2 | 2. Portfolio Investment | 0.2 | 0.1 | 0.2 | 2.1 Equity Securities | 0.0 | - | - | 2.2 Debt Securities | 0.2 | 0.1 | 0.2 | 3. Other Investment | 2.0 | 1.9 | 3.0 | 3.1 Trade Credits | 0.0 | 0.0 | 0.2 | 3.2 Loans | 0.4 | 0.2 | 0.5 | 3.3 Currency and Deposits | 0.9 | 1.0 | 1.6 | 3.4 Other Assets | 0.7 | 0.7 | 0.7 | 4. Reserve Assets | 15.1 | 17.7 | 21.4 | B. Liabilities | 39.5 | 40.4 | 45.0 | 1. Direct Investment in India | 14.6 | 15.5 | 18.0 | 2. Portfolio Investment | 9.5 | 9.1 | 10.5 | 2.1 Equity Securities | 5.4 | 5.0 | 6.6 | 2.2 Debt securities | 4.1 | 4.1 | 3.9 | 3. Other Investment | 15.3 | 15.8 | 16.5 | 3.1 Trade Credits | 3.9 | 3.9 | 3.7 | 3.2 Loans | 6.1 | 6.6 | 7.0 | 3.3 Currency and Deposits | 4.8 | 4.8 | 5.2 | 3.4 Other Liabilities | 0.6 | 0.5 | 0.5 | Note: - Negligible. | Table 3: Composition of International Financial Assets and Liabilities of India | (per cent) | Period | Mar-20(R) | Jun-20(PR) | Sep-20(PR) | Dec-20(PR) | Mar-21(P) | A. Assets | | | | | | 1. Direct Investment | 25.5 | 24.8 | 23.4 | 22.4 | 22.6 | 2. Portfolio Investment | 0.5 | 0.6 | 0.6 | 0.6 | 0.7 | 3. Other Investment | 7.3 | 7.1 | 8.1 | 8.2 | 9.5 | 4. Reserve Assets | 66.7 | 67.5 | 67.9 | 68.8 | 67.2 | Assets/Liabilities | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | B. Liabilities | 1. Direct Investment | 38.3 | 38.3 | 40.0 | 40.2 | 39.8 | 2. Portfolio Investment | 22.6 | 22.1 | 22.2 | 23.0 | 23.3 | 3. Other Investment | 39.1 | 39.6 | 37.8 | 36.8 | 36.9 | Table 4: Share of External Debt and Non-Debt Liabilities of India | (per cent) | Period | Mar-20(R) | Jun-20(PR) | Sep-20(PR) | Dec-20(PR) | Mar-21(P) | Non-Debt Liabilities | 48.5 | 48.9 | 50.8 | 52.4 | 52.4 | Debt Liabilities | 51.5 | 51.1 | 49.2 | 47.6 | 47.6 | Total | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | | |