India’s net overseas liabilities up at $244.8 billion in January-March 2012

Net overseas liabilities of India, in terms of its international investment position (IIP), increased to $244.8 billion at end-March 2012, from $204.8 billion at end-December 2011, showing an increase of $40 billion, figures released by the Reserve Bank of India (RBI) showed.

This was mainly on account of a $45.5 billion increase in liabilities during the quarter, which was partially offset by an increase in assets of $5.5 billion.

The changes in IIP also reflect the valuation changes emanating from exchange rate movements, RBI said.

External financial assets of the country stood at $437.1 billion as at end-March 2012, showing an increase of $5.5 billion over the previous quarter ended December 2011. Reserve assets, which remained the major component, declined by $2.3 billion to $294.4 billion at end-March 2012. Among other sources, direct investment abroad moved up by $2.8 billion during the quarter to $111.7 billion as at end-March 2012.

On the other hand, India's external financial liabilities widened by $45.5 billion over the previous quarter to $682 billion as at end-March 2012. Direct and portfolio investments in India increased by $15.7 billion and $19.2 billion, respectively. Among other investments, loans (mainly ECBs) and currency and deposits (mainly NRI deposits) increased by $2.2 billion and $6.2 billion, respectively.

 The rupee appreciation during end-December 2011 to end-March 2012 resulted in an upward revision of equity liabilities for December 2011 by $17.7 billion (at end-March 2012 exchange rate). This included $11.4 billion in direct investment and $ 6.3 billion in portfolio investment.