India's International Investment Balances Shift

RBI data shows a USD 19.8 billion decline in net claims of non-residents on India in Q2 2024, attributed to a significant rise in Indian residents' overseas financial assets. The exchange rate variation and an increase in reserve assets and portfolio investments influenced this shift.

Data from the Reserve Bank of India reveals that net claims of non-residents on India decreased by USD 19.8 billion in the second quarter of 2024, reaching USD 348.5 billion by September. This decline is largely due to a substantial increase of USD 66.5 billion in overseas financial assets owned by Indian residents.

A surge in reserve assets of USD 53.8 billion contributed to over 80% of this increase, according to RBI's report on 'India's International Investment Position, September 2024'. The rise in inward portfolio investments and loans, totaling USD 31.9 billion, also played a role in escalating foreign liabilities for Indian residents this quarter.

The exchange rate fluctuations of the rupee against other currencies further impacted the valuation changes in liabilities. India's asset-to-liability ratio saw an improvement, rising to 76.2% in September 2024, up from the previous quarter's 74.1%, with debt liabilities increasing as a share of total external liabilities.

(With inputs from agencies.)