India's overseas financial liabilities down $12.8 bn in Q2

India's international financial liabilities declined by $12.8 billion to $296.2 billion in the three months ended 30 September 2013, the Reserve Bank of India said in a statement.

Net claims of non-residents, as reflected by the net international investment position (IIP) declined by $12.8 billion to $296.2 billion at the end of September 2013 from $309 billion at the end of June 2013. This represents a $10.6 billion decrease in the value of foreign-owned assets in India vis-à-vis a $2.2 billion increase in the value of financial assets held by Indian residents abroad.

Indian residents' financial assets abroad stood at $436.7 billion as of end-September 2013, showing a marginal increase of $2.2 billion over previous quarter, mainly due to increase of $6.8 billion in alternative investments abroad such as trade credit, loans and currency and deposits, RBI data showed.

Reserve assets of the country declined by $5.3 billion to $277.2 billion as of end-September 2013. Direct investments increased marginally by $0.6 billion.

Foreign-owned assets in India decreased by $10.6 billion over the previous quarter to $732.9 billion as of end-September 2013. Both direct investment and portfolio investment in India declined by $2.9 billion and $13.3 billion, respectively.

Among other investment liabilities, trade credit decreased by $1.9 billion while loans increased by $2.8 billion.

RBI said the variation in exchange rate of the rupee vis-a-vis other currencies influenced change in liabilities, when valued in dollar terms. Though there was a net inflow of $6.6 billion during the period, equity liabilities in dollar terms declined by $10.2 billion, from $340.7 billion in June 2013 to $330.5 billion in September 2013 due to the stock valuation effect resulting from rupee depreciation.