Net claims of non-residents on India up $27 billion at $307 billion in May

Net claims of non-residents on India as reflected by the Net IIP (or the difference between the country's international financial assets abroad and its international financial liabilities) increased by $27.1 billion to $307.3 billion during the quarter ended March 2013, compared with the level at the end of the previous quarter, mainly on account of a $31.0 billion increase in liabilities.

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

The Indian residents' financial assets abroad stood at $447.8 billion as of end-March 2013, recording an increase of $3.9 billion over the previous quarter. Reserve assets, which remained the major component of international financial assets, decreased by $3.5 billion to $292.1 billion at end-March 2013. Direct investment abroad moved up by $1.4 billion during the quarter to $119.5 billion as of end-March 2013 and other investment abroad (mainly currency and deposits) increased by $6.1 billion.

The international financial liabilities of the country increased by $31.0 billion over the previous quarter to $755.1 billion as of end-March 2013. Direct investments in India and portfolio investments in India moved up by $8.6 billion and $13.9 billion, respectively.

Among other investment liabilities, trade credit and currency and deposits (mainly NRI deposits) increased by $4.4 billion and $3.2 billion, respectively.

Due to rupee appreciation during end-December 2012 to end-March 2013 equity liabilities in dollar terms were revised upwards by $2.4 billion ($1.5 billion in direct investment and $0.9 billion in portfolio investment).

The ratio of India's international financial assets to international financial liabilities decreased to 59.3 per cent in March 2013 (61.3 per cent in December 2012).

On a year-on-year basis, India's financial assets abroad increased by $10.6 billion. Of these, direct investment abroad moved up by $7.1 billion while reserve assets declined by $2.3 billion.

International financial liabilities of the country increased by $68.4 billion on a year-on-year basis. Both direct investment and portfolio investment in India increased by $11.5 billion and $17.2 billion, respectively. Other investment liabilities in the form of trade credit, loan and currency and deposits increased by $39.8 billion.

Net claims of non-residents on India increased by $57.8 billion as of end-March 2013, on a year-on-year basis.