Net claims of non-residents on India up $73.2 billion in December 2012

Net claims of non-residents on India, based on the net international investment position of Indians, increased by $73.2 billion as of end-December 2012, on a year-on-year basis.

Net claims of non-residents on India (as reflected by the net international investment position, ie, the difference between international financial assets held abroad and international financial liabilities), increased by $10.4 billion to $282.0 billion during the quarter ended 31 December 2012, mainly on account of a $10.5 billion increase in liabilities, the Reserve Bank of India said in a report.

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

The Indian residents' financial assets abroad stood at $441.9 billion as of end-December 2012, unchanged from the previous quarter.

Reserve assets, which remained the major component of international financial assets, rose by $0.8 billion to $295.6 billion at end-December 2012.

Direct investment abroad moved up by $2.3 billion during the quarter to $118.2 billion as of end-December 2012, whereas other investments abroad (mainly trade credit, currency and deposits and loans) declined by $3.1 billion.

On the other hand, international financial liabilities of Indians increased by $10.5 billion over the previous quarter to $723.9 billion during the quarter ended 31 December 2012.

While direct investments in India declined by $3.5 billion, portfolio investments in India increased by $4.9 billion.

Among other investments liabilities, trade credit, loan and currency and deposits (mainly NRI deposits) increased by $6.2 billion, $0.7 billion and $0.6 billion, respectively.

Due to the rupee depreciation during end-September 2012 to end-December 2012, equity liabilities in dollar terms were revised downwards by $13.2 billion ($8.4 billion in direct investment and $4.8 billion in portfolio investment).

The ratio of India's international financial assets to international financial liabilities decreased to 61.0 per cent in December 2012 (61.9 per cent in September 2012).

On an annual basis, international financial assets held by Indians abroad increased by $9.9 billion from the previous 9-month period ended 31 December 2011.

Among the external financial assets, direct investment abroad moved up by $8.7 billion while reserve assets declined by $1.1 billion.

International financial liabilities increased by $83.1 billion to $723.9 billion as of end-December 2012.

Both direct investment and portfolio investment in India increased by $19.9 billion and $22.9 billion, respectively. Other investment liabilities, including trade credit, loan and currency and deposits increased by $40.3 billion.