Non-resident claims on India increased by $34.3 billion to $389.6 billion in Q2 FY23: RBI

Net claims of non-residents on India increased by $34.3 billion during the July-September quarter of the current financial year (2022-23) and stood at $389.6 billion in September 2022, Reserve Bank of India (RBI) report showed.

Overseas financial assets of Indian residents, on the other hand, declined by $43.9 billion during July-September 2022 due to reduction in reserves assets, even as trade credit, currency and deposits, and overseas direct investment recorded increase. The reduction in non-residents’ financial assets in India was relatively lower at $9.6 billion, RBI stated in its report.
Reserve assets remained the dominant component (62.9 per cent share) in India’s international financial assets (it had declined by $56.5 billion during July-September 2022, where valuation losses accounted for a major part.
RBI attributed the fall in India’s foreign liabilities during Q2 FY 23 primarily to direct investment (net) outflows; portfolio. Other investments also recorded marginal decline on a net basis, barring trade credit which increased by $5.1 billion.
Variation in the exchange rate of rupee vis-a-vis other currencies also impacted the change in liabilities, when valued in US dollar terms.
Debt and non-debt liabilities continued to have equal share in total external liabilities.
The ratio of international assets to international liabilities moderated to 68.5 per cent in September 2022 from 71.5 per cent a quarter ago.