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 Table 1: Overall International Investment Position of India | (US $ billion) | Period | Mar-19 (R) | Jun-19 (PR) | Sep-19 (PR) | Dec-19 (PR) | Mar-20 (P) | Net IIP | -436.9 | -451.6 | -436.5 | -425.1 | -379.3 | A. Assets | 641.7 | 662.2 | 669.5 | 697.9 | 715.6 | 1. Direct Investment | 170.0 | 173.2 | 176.2 | 179.7 | 183.0 | 2. Portfolio Investment | 4.7 | 5.0 | 4.5 | 4.8 | 3.8 | 2.1 Equity Securities | 0.6 | 1.8 | 2.3 | 2.6 | 0.6 | 2.2 Debt Securities | 4.1 | 3.2 | 2.2 | 2.2 | 3.2 | 3. Other Investment | 54.2 | 54.1 | 55.0 | 53.4 | 51.0 | 3.1 Trade Credits | 0.9 | 2.1 | 1.6 | 2.2 | 1.5 | 3.2 Loans | 9.9 | 9.8 | 7.9 | 6.2 | 6.7 | 3.3 Currency and Deposits | 25.2 | 24.2 | 27.6 | 27.1 | 26.0 | 3.4 Other Assets | 18.2 | 18.1 | 17.9 | 17.9 | 16.8 | 4. Reserve Assets | 412.9 | 429.8 | 433.7 | 459.9 | 477.8 | B. Liabilities | 1078.6 | 1113.8 | 1106.0 | 1123.0 | 1094.9 | 1. Direct Investment | 399.2 | 417.6 | 417.1 | 426.9 | 418.2 | 2. Portfolio Investment | 260.3 | 266.8 | 260.0 | 266.7 | 246.6 | 2.1 Equity Securities | 147.5 | 151.2 | 144.0 | 148.9 | 134.8 | 2.2 Debt securities | 112.8 | 115.6 | 116.0 | 117.8 | 111.8 | 3. Other Investment | 419.1 | 429.3 | 428.9 | 429.3 | 430.1 | 3.1 Trade Credits | 105.2 | 107.2 | 106.6 | 105.2 | 104.3 | 3.2 Loans | 167.9 | 173.7 | 174.8 | 177.3 | 180.0 | 3.3 Currency and Deposits | 130.6 | 133.8 | 133.1 | 133.3 | 130.8 | 3.4 Other Liabilities | 15.3 | 14.5 | 14.4 | 13.5 | 15.0 | Memo item: Assets to Liability Ratio (%) | 59.5 | 59.5 | 60.5 | 62.1 | 65.4 | 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-18 (R) | Mar-19 (PR) | Mar-20 (P) | Net IIP (Assets - Liabilities) | -15.9 | -15.9 | -14.0 | A. Assets | 24.1 | 23.4 | 26.5 | 1. Direct Investment Abroad | 6.0 | 6.2 | 6.8 | 2. Portfolio Investment | 0.2 | 0.2 | 0.1 | 2.1 Equity Securities | 0.1 | - | - | 2.2 Debt Securities | 0.1 | 0.2 | 0.1 | 3. Other Investment | 1.8 | 2.0 | 1.9 | 3.1 Trade Credits | 0.1 | 0.0 | 0.0 | 3.2 Loans | 0.3 | 0.4 | 0.2 | 3.3 Currency and Deposits | 0.8 | 0.9 | 1.0 | 3.4 Other Assets | 0.7 | 0.7 | 0.6 | 4. Reserve Assets | 16.1 | 15.1 | 17.7 | B. Liabilities | 40.0 | 39.3 | 40.5 | 1. Direct Investment in India | 14.4 | 14.6 | 15.5 | 2. Portfolio Investment | 10.4 | 9.5 | 9.1 | 2.1 Equity Securities | 5.9 | 5.4 | 5.0 | 2.2 Debt securities | 4.5 | 4.1 | 4.1 | 3. Other Investment | 15.3 | 15.3 | 15.9 | 3.1 Trade Credits | 3.9 | 3.8 | 3.9 | 3.2 Loans | 6.1 | 6.1 | 6.7 | 3.3 Currency and Deposits | 4.8 | 4.8 | 4.8 | 3.4 Other Liabilities | 0.4 | 0.6 | 0.6 | Note - : Negligible. | Table 3: Composition of International Financial Assets and Liabilities of India | (per cent) | Period | Mar-19 (R) | Jun-19 (PR) | Sep-19 (PR) | Dec-19 (PR) | Mar-20 (P) | A. Assets | | | | | | 1. Direct Investment | 26.5 | 26.1 | 26.3 | 25.7 | 25.6 | 2. Portfolio Investment | 0.7 | 0.8 | 0.7 | 0.7 | 0.5 | 3. Other Investment | 8.5 | 8.2 | 8.2 | 7.7 | 7.1 | 4. Reserve Assets | 64.3 | 64.9 | 64.8 | 65.9 | 66.8 | Assets/Liabilities | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | B. Liabilities | 1. Direct Investment | 37.0 | 37.5 | 37.7 | 38.0 | 38.2 | 2. Portfolio Investment | 24.1 | 24.0 | 23.5 | 23.8 | 22.5 | 3. Other Investment | 38.9 | 38.5 | 38.8 | 38.2 | 39.3 | Table 4: Share of External Debt and Non-Debt Liabilities of India | (per cent) | Period | Mar-19 (R) | Jun-19 (PR) | Sep-19 (PR) | Dec-19 (PR) | Mar-20 (P) | Non-Debt Liabilities | 49.1 | 49.5 | 49.1 | 49.3 | 48.4 | Debt Liabilities | 50.9 | 50.5 | 50.9 | 50.7 | 51.6 | Total | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 |
| |