Net liabilities of residents in India to non-residents, measured in terms of the difference between the economy's external financial assets and liabilities or the country's net international investment position (IIP) increased by $14.8 billion over the previous quarter to $367.6 billion as of end-September 2016.
Net claims of non-residents on India (as reflected by the net International Investment Position (IIP), increased by $14.8 billion over the previous quarter to $367.6 billion as of end-September 2016, RBI stated in a release.
The value of foreign-owned assets in India increased by $27.3 billion while the value of Indian residents' financial assets abroad increased by $12.5 billion during the period.
The value of Indian residents' financial assets abroad stood at $564.8 billion as of end-September 2016, showing an increase of $12.5 billion over previous quarter mainly due to increase of $8.5 billion in reserve assets and $5.2 billion in currency and deposits, even as direct investment declined by $3.2 billion during the quarter, according to RBI data.
Against this, foreign-owned assets in India increased by $27.3 billion over the previous quarter to $932.4 billion as of end-September 2016, mainly due to the increase in direct investment and portfolio investments in India by $17.6 billion and $11.6 billion, respectively.
Variation in exchange rate of rupee against other currencies affected change in liabilities, when valued in dollar terms. There was a net equity inflow of $17.8 billion during the period. However, equity liabilities increased by $23.9 billion from $421.7 billion in June 2016 to $445.6 billion in September 2016.
The ratio of India's international financial assets to international financial liabilities stood at 60.6 per cent in September 2016 (61.0 per cent in June 2016).
Reserve assets with the RBI continued to have the dominant share (65.9 per cent) in India's international financial assets as of September 2016, followed by direct investment abroad (24.8 per cent).
Direct Investment (33.4 per cent), portfolio investment (24.9 per cent), loans (17.9 per cent), and currency and deposits (14.0 per cent) were the major constituents of the country's financial liabilities in September 2016.
The share of non-debt liabilities increased to 47.8 per cent as of end-September 2016 from 46.6 per cent at end-June 2016.
International Investment Position (IIP) is a statistical statement that shows, at a point in time, the value and the composition of financial assets of residents of an economy that are claims on non-residents, and gold bullion held as reserve assets; and liabilities of residents of an economy to non-residents.
The difference between an economy's external financial assets and liabilities is its net IIP, which may be positive or negative