India's net liabilities up at $221 billion in October-December 2010

Net claims of non-residents on India as reflected by the net international investment position (IIP) of the country increased to $221.1 billion as of end-December 2010, rising $18.2 billion from the previous quarter.

International investment position, which is the difference between the international financial assets of the country and its international financial liabilities, increased by $18.2 billion sequentially in the October-December quarter, the Reserve Bank of India said in a release today.

The increase has mainly been due to increases in net inflows on account of direct and portfolio investments as well as external commercial borrowings (ECBs), RBI said.

As of end-December 2010, India's international financial assets stood at $407.5 billion, up $4.6 billion over the previous quarter. Reserve assets, which remained the major source, increased by $4.5 billion to $297.3 billion at end-December 2010. Among other sources, direct investment abroad moved up by $3.2 billion during the quarter to $92.4 billion as of end-December 2010.

On the other hand, international financial liabilities of the country increased by $22.7 billion over the previous quarter to $628.6 billion as of end-December 2010. Direct and portfolio investments in India increased by $6.1 billion and $7.5 billion, respectively while trade credit and loans (mainly ECBs) increased by $3 billion and $5.6 billion respectively, RBI noted.

The ratio of India's international financial assets to international financial liabilities continued to decline, falling further to 64.8 per cent during the December 2010 quarter against 66.5 per cent in the September 2010 quarter.