India’s International Investment Position (IIP), June 2023

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Date: 28th Sep, 2023 Source: Reserve Bank of India Country: India Original Source

Brief

Summary:

The Reserve Bank of India has released data on India's International Investment Position (IIP) for end-June 2023. Key highlights:

India's net claims of non-residents on India increased by US$ 12.1 billion during Q1:2023-24, reaching US$ 379.7 billion.
The rise in net claims was driven by a higher increase in foreign-owned financial assets in India (US$ 36.2 billion) compared to Indian residents' overseas financial assets (US$ 24.1 billion).
Reserve assets accounted for 64.2% of India's international financial assets, while debt and non-debt liabilities accounted for nearly equal shares in total external liabilities.
The ratio of India's international assets to international liabilities moderated to 70.9% in June 2023 from 71.1% a quarter ago and 71.5% a year ago.

These statistics provide insights into India's international financial situation and its economic relationships with other countries.

Today, the Reserve Bank released data relating to India’s International Investment Position for end-June 2023^[1].

Key Features of India’s IIP in end-June 2023:

Net claims of non-residents on India increased by US$ 12.1 billion during Q1:2023-24 and stood at US$ 379.7 billion as at end-June 2023.
The rise in net claims of non-residents during the quarter was on account of higher rise in foreign-owned financial assets in India (US$ 36.2 billion) when compared with Indian residents’ overseas financial assets (US$ 24.1 billion) (Table 1).
Increase in reserve assets (US$ 16.6 billion) was the largest contributor to the rise in Indian residents’ foreign assets during April-June 2023, followed by direct investment, loans and trade credit.
Inward portfolio investment (US$ 15.0 billion) and foreign direct investment (US$ 8.9 billion) together accounted for two thirds of the rise in foreign liabilities of Indian residents.
Reserve assets accounted for 64.2 per cent of India’s international financial assets at end-June 2023 (Tables 1 and 2).
Variation in the exchange rate of rupee vis-a-vis other currencies impacted the change in liabilities, when valued in the US dollar terms.
The ratio of India’s international assets to international liabilities moderated to 70.9 per cent in June 2023 from 71.1 per cent a quarter ago and 71.5 per cent a year ago.
Debt and non-debt liabilities accounted for nearly equal share in total external liabilities during the quarter (Table 3).

(Yogesh Dayal)
Chief General Manager

Press Release: 2023-2024/1011

Table 1: Overall International Investment Position of India
(US$ billion)
Period	Jun-22 (PR)	Sep-22 (PR)	Dec-22 (PR)	Mar-23 (PR)	Jun-23 (P)
Net IIP (A-B)	-355.2	-386.6	-373.3	-367.6	-379.7
A. Assets	891.6	846.9	875.7	902.7	926.8
1. Direct Investment	214.5	217.3	222.7	225.5	227.8
1.1 Equity and investment fund shares	134.6	136.2	140.1	142.0	143.5
1.2 Debt instruments	79.9	81.1	82.6	83.5	84.3
2. Portfolio Investment	10.6	11.0	10.9	11.0	11.3
2.1 Equity and investment fund shares	8.1	6.3	8.6	5.0	8.7
2.2 Debt securities	2.5	4.7	2.3	6.0	2.6
3. Other Investment	77.3	85.9	79.4	87.7	92.6
3.1 Trade Credits	21.1	24.6	26.0	27.5	29.7
3.2 Loans	6.5	8.1	8.6	10.7	14.5
3.3 Currency and Deposits	30.2	33.5	27.1	30.5	30.6
3.4 Other Assets	19.5	19.7	17.7	19.0	17.8
4. Reserve Assets	589.2	532.7	562.7	578.5	595.1
B. Liabilities	1,246.8	1,233.5	1,249.0	1,270.3	1,306.5
1. Direct Investment	517.3	510.2	510.8	523.4	532.3
1.1 Equity and investment fund shares	489.6	482.0	482.1	493.9	501.4
1.2 Debt instruments	27.7	28.2	28.7	29.5	30.9
2. Portfolio Investment	245.0	244.4	244.2	243.6	258.6
2.1 Equity and investment fund shares	135.5	137.0	140.5	139.0	152.9
2.2 Debt securities	109.5	107.4	103.7	104.6	105.7
3. Other Investment	484.5	478.9	494.0	503.3	515.6
3.1 Trade Credits	122.8	123.2	124.6	124.3	119.3
3.2 Loans	193.4	190.3	196.7	202.6	207.1
3.3 Currency and Deposits	137.4	135.6	136.1	141.1	144.1
3.4 Other Assets	30.9	29.8	36.6	35.3	45.1
Memo Item: Assets to Liability ratio (%)	71.5	68.7	70.1	71.1	70.9
Note: 1. PR: Partially revised, P: Provisional 2. The sum of the constituent items may not add to the total due to rounding off.

Table 2: Composition of International Financial Assets and Liabilities of India
(per cent)
Period	Jun-22 (PR)	Sep-22 (PR)	Dec-22 (PR)	Mar-23 (PR)	Jun-23 (P)
A. Assets
1. Direct Investment	24.0	25.7	25.4	25.0	24.6
2. Portfolio Investment	1.2	1.3	1.2	1.2	1.2
3. Other Investment	8.7	10.1	9.1	9.7	10.0
4. Reserve Assets	66.1	62.9	64.3	64.1	64.2
Total	100.0	100.0	100.0	100.0	100.0
B. Liabilities
1. Direct Investment	41.5	41.4	40.9	41.2	40.7
2. Portfolio Investment	19.6	19.8	19.5	19.2	19.8
3. Other Investment	38.9	38.8	39.6	39.6	39.5
Total	100.0	100.0	100.0	100.0	100.0

Table 3: Share of External Debt and Non-Debt Liabilities of India
(per cent)
Period	Jun-22 (PR)	Sep-22 (PR)	Dec-22 (PR)	Mar-23 (PR)	Jun-23 (P)
Non-Debt Liabilities	50.1	50.2	49.8	49.8	50.1
Debt Liabilities	49.9	49.8	50.2	50.2	49.9
Total	100.0	100.0	100.0	100.0	100.0

^[1] India’s quarterly IIP is disseminated with a lag of one quarter and the previous quarterly IIP for end-March 2023 was released in the RBI website on June 30, 2023.

Highlights content goes here...

Summary

The Reserve Bank of India recently published the International Investment Position (IIP) of India for end-June 2023, providing insights into the country’s international financial assets and liabilities. The key features and trends observed in the data are as follows:

Net claims of non-residents on India increased by US$ 12.1 billion during Q1:2023-24, reaching US$ 379.7 billion as of end-June 2023.
The rise in net claims was driven by a higher growth in foreign-owned financial assets in India (US$ 36.2 billion) compared to Indian residents’ overseas financial assets (US$ 24.1 billion).
Reserve assets accounted for 64.2% of India’s international financial assets, making it the largest contributor to total assets.
The ratio of India’s international assets to liabilities moderated to 70.9% in June 2023, compared to 71.1% in the previous quarter and 71.5% a year ago.
Debt and non-debt liabilities accounted for nearly equal shares in total external liabilities during the quarter.

Composition of International Financial Assets and Liabilities

Direct investment accounted for 24.6% of total assets, followed by reserve assets (64.2%), and other investment (10.0%).
On the liability side, direct investment accounted for 40.7%, portfolio investment (19.8%), and other investment (39.5%).

Share of External Debt and Non-Debt Liabilities

Non-debt liabilities accounted for 50.1% of total liabilities in June 2023, consistent with the previous quarters.

Conclusion

The data suggests that India’s net claims on non-residents increased, driven by growth in foreign-owned financial assets. The country’s international financial assets are predominantly composed of reserve assets, while debt and non-debt liabilities share nearly equal proportions. The ratio of international assets to liabilities has moderated, reflecting the impacts of exchange rate fluctuations. Overall, the data provides insights into India’s international investment position and highlights trends in its financial flows.

Reserve Bank of India

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