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India’s International Investment Position (IIP), March 2023

Today, the Reserve Bank released data relating to India’s International Investment Position for end-March 2023[1].

Key Features

IIP during January-March 2023:

  • Net claims of non-residents on India declined by US$ 5.7 billion during Q4:2022-23 and stood at US$ 367.8 billion in March 2023.

  • Indian residents’ overseas financial assets increased by US$ 27.1 billion during the quarter, which was higher than the rise in foreign-owned assets in India (US$ 21.4 billion) and led to the decline in net claims of non-residents (Table 1).

  • Reserve assets increased for the second successive quarter and accounted for 64.1 per cent of India’s international financial assets in March 2023 (Table 3).

  • The rise in foreign liabilities during the quarter was led by the increase in direct investment, loans as well as currency and deposits.

  • Debt and non-debt liabilities continued to account for nearly equal share in total external liabilities (Table 4).

  • The ratio of India’s international assets to international liabilities increased to 71.1 per cent in March 2023 from 70.1 per cent a quarter ago.

IIP during April-March 2022-23:

  • India’s external liabilities and assets both declined during 2022-23; a higher decline in the latter led to a rise in net claims of non-residents (Table 1).

  • Total overseas financial assets of residents declined during the year as the reduction in reserve assets, and currency and deposits exceeded the rise in overseas direct investment and trade credit (Table 1).

  • Portfolio investment outflows (net) was the primary driver of the fall in foreign liabilities during the year.

  • Variation in the exchange rate of rupee vis-a-vis other currencies impacted the change in liabilities, when valued in US dollar terms.

  • The share of debt liabilities in total external liabilities increased to 50.2 per cent in March 2023 from 49.1 per cent a year earlier (Table 4).

Ratio of International Financial Assets and Liabilities to Gross Domestic Product (GDP):

  • As a ratio to GDP (at current market prices), India’s reserve assets, residents’ overseas financial assets as well as claims of non-residents on India declined during 2022-23 (Table 2).

  • The ratio of net claims of non-residents on India to GDP stood at (-)11.2 per cent in March 2023 as compared with (-)11.7 per cent a year ago and (-)13.2 per cent two years ago.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2023-2024/510


Table 1: Overall International Investment Position of India
(US$ billion)
Period Mar-22 (PR) Jun-22 (PR) Sep-22 (PR) Dec-22 (PR) Mar-23 (P)
Net IIP (A-B) -358.3 -355.4 -386.6 -373.5 -367.8
A. Assets 920.5 891.6 846.9 875.7 902.8
  1. Direct Investment 211.6 214.4 217.3 222.6 225.6
    1.1 Equity and investment fund shares 132.8 134.6 136.2 140.1 142.1
    1.2 Debt instruments 78.8 79.8 81.1 82.5 83.5
  2. Portfolio Investment 10.6 10.6 11.0 10.9 11.0
    2.1 Equity and investment fund shares 1.1 8.1 6.3 8.6 5.0
    2.2 Debt securities 9.5 2.5 4.7 2.3 6.0
  3. Other Investment 91.0 77.4 85.9 79.5 87.7
    3.1 Trade Credits 18.6 21.1 24.6 26.1 27.5
    3.2 Loans 10.5 6.5 8.1 8.6 10.7
    3.3 Currency and Deposits 42.1 30.2 33.5 27.1 30.5
    3.4 Other Assets 19.8 19.6 19.7 17.7 19.0
  4. Reserve Assets 607.3 589.2 532.7 562.7 578.5
B. Liabilities 1278.8 1247.0 1233.5 1249.2 1270.6
  1. Direct Investment 521.7 517.3 510.2 510.8 523.3
    1.1 Equity and investment fund shares 494.0 489.6 482.0 482.1 493.9
    1.2 Debt instruments 27.7 27.7 28.2 28.7 29.4
  2. Portfolio Investment 268.6 244.6 244.0 243.9 243.4
    2.1 Equity and investment fund shares 156.4 135.5 137.0 140.5 139.0
    2.2 Debt securities 112.2 109.1 107.0 103.4 104.4
  3. Other Investment 488.5 485.1 479.3 494.5 503.9
    3.1 Trade Credits 117.8 122.8 123.2 124.6 124.3
    3.2 Loans 197.5 194.0 190.7 197.2 203.1
    3.3 Currency and Deposits 141.0 137.4 135.6 136.1 141.1
    3.4 Other Assets 32.2 30.9 29.8 36.6 35.4
Memo Item: Assets to Liability ratio (%) 72.0 71.5 68.7 70.1 71.1
Note:
1. PR: Partially revised, P: Provisional
2. 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-21 (R) Mar-22 (PR) Mar-23 (PR)
Net IIP (A-B) -13.2 -11.7 -11.2
A. Assets 31.7 29.6 27.1
  1. Direct Investment 7.1 6.8 6.8
    1.1 Equity and investment fund shares 4.5 4.3 4.3
    1.2 Debt instruments 2.6 2.5 2.5
  2. Portfolio Investment 0.3 0.3 0.3
    2.1 Equity and investment fund shares 0.1 0.0 0.1
    2.2 Debt securities 0.2 0.3 0.2
  3. Other Investment 3.0 2.9 2.6
    3.1 Trade Credits 0.2 0.6 0.8
    3.2 Loans 0.5 0.3 0.3
    3.3 Currency and Deposits 1.6 1.4 0.9
    3.4 Other Assets 0.7 0.6 0.6
  4. Reserve Assets 21.3 19.6 17.4
B. Liabilities 44.9 41.3 38.3
  1. Direct Investment 17.8 16.8 15.8
    1.1 Equity and investment fund shares 16.9 16.0 14.9
    1.2 Debt instruments 0.9 0.8 0.9
  2. Portfolio Investment 10.5 8.7 7.3
    2.1 Equity and investment fund shares 6.5 5.1 4.2
    2.2 Debt securities 4.0 3.6 3.1
  3. Other Investment 16.6 15.8 15.2
    3.1 Trade Credits 3.7 3.8 3.8
    3.2 Loans 7.1 6.4 6.1
    3.3 Currency and Deposits 5.3 4.6 4.2
    3.4 Other Assets 0.5 1.0 1.1
Note:
1. R: Revised, PR: Partially revised, P: Provisional

Table 3: Composition of International Financial Assets and Liabilities of India
(per cent)
Period Mar-22 (PR) Jun-22 (PR) Sep-22 (PR) Dec-22 (PR) Mar-23 (P)
A. Assets          
    1. Direct Investment 23.0 24.0 25.7 25.4 25.0
    2. Portfolio Investment 1.1 1.2 1.3 1.2 1.2
    3. Other Investment 9.9 8.7 10.1 9.1 9.7
    4. Reserve Assets 66.0 66.1 62.9 64.3 64.1
Assets/Liabilities 100.0 100.0 100.0 100.0 100.0
B. Liabilities          
    1. Direct Investment 40.8 41.5 41.4 40.9 41.2
    2. Portfolio Investment 21.0 19.6 19.8 19.5 19.1
    3. Other Investment 38.2 38.9 38.8 39.6 39.7

Table 4: Share of External Debt and Non-Debt Liabilities of India
(per cent)
Period Mar-22 (PR) Jun-22 (PR) Sep-22 (PR) Dec-22 (PR) Mar-23 (P)
Non-Debt Liabilities 50.9 50.1 50.2 49.8 49.8
Debt Liabilities 49.1 49.9 49.8 50.2 50.2
Total 100.0 100.0 100.0 100.0 100.0

[1] India’s quarterly IIP is disseminated with a lag of one quarter and the previous quarterly IIP for end-December 2022 was released in the RBI website on March 31, 2023.

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