India’s International Investment Position , March 2022
India’s International Investment Position , March 2022.
Key Features of
India’s IIP in end-March 2022 : Quarterly
Variations:
· Net claims of non-residents on India increased by US$ 5.6 billion during Q4:2021-22 to US$ 359.8 billion in March 2022.
· This rise in net claims was due to larger decline in the Indian residents’ overseas financial assets [US$ (-)7.3 billion] when compared to the decline in foreign-owned assets in India [US$ (-)1.7 billion] (Table 1).
· Foreign assets of Indian residents declined during Q4:20221-22, mainly due to a decrease of US$ 26.3 billion in reserve assets even as direct, portfolio and other investments, such as, trade credit and currency and deposits increased during the period.
· Even though reserve assets declined during the quarter, it accounted for around two thirds of India’s international financial assets (Table 3).
· The decline in India’s foreign liabilities during the quarter is attributed to reduction in portfolio investment as well as currency and deposits.
· Variation in the exchange rate of rupee vis-a-vis other currencies had a significant impact on the change in liabilities, when valued in US$ terms, as the rupee depreciated by 2.02 per cent during the quarter.
· The share of debt liabilities in total external liabilities increased marginally to 49.2 per cent as at end-March 2022 from 48.5 per cent a quarter ago (Table 4)
. Annual
Variations
·
During 2021-22, non-residents’ net claims on India increased by
US$ 4.6 billion: increase in foreign owned assets in India (US$ 65.8 billion)
exceeded the rise in overseas assets of Indian residents (US$ 61.1 billion) (Table 1).
·
International financial assets of Indian residents increased
primarily due to increase in reserve assets (US$ 30.3 billion), direct
investment (US$ 17.7 billion) and trade credits (US$ 13.0 billion).
·
In spite of a decline of US$ 16.1 billion in portfolio investment
during the financial year, international financial liabilities increased on the
back of large rise in direct investment in India (US$ 39.6 billion) and other
investments (US$ 42.4 billion).
·
Variation in the exchange rate of rupee vis-a-vis other currencies
affected change in liabilities, when valued in US$ terms.
The ratio of India’s
international financial assets to international financial liabilities increased
to 71.9 per cent in March 2022 from 70.8 per cent a year ago.
Ratio of International
Financial Assets and Liabilities to GDP (at current prices):
·
The ratio of net claims of non-residents on India to nominal GDP
improved to (-)11.6 per cent in March 2022 from (-)13.2 per cent a year ago
|
Table 1: Overall International Investment Position of India |
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(US$ billion) |
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Period |
Mar-21 (PR) |
Jun-21 (PR) |
Sep-21 (PR) |
Dec-21 (PR) |
Mar-22 (P) |
|
Net IIP (A-B) |
-355.2 |
-330.8 |
-335.6 |
-354.2 |
-359.8 |
|
A. Assets |
859.5 |
895.4 |
932.3 |
927.9 |
920.6 |
|
1. Direct Investment |
193.9 |
199.6 |
203.8 |
208.1 |
211.6 |
|
1.1 Equity and
investment fund shares |
122.7 |
125.6 |
128.1 |
130.9 |
132.8 |
|
1.2 Debt instruments |
71.2 |
74.1 |
75.8 |
77.2 |
78.8 |
|
2. Portfolio
Investment |
7.9 |
7.9 |
8.6 |
9.7 |
10.6 |
|
2.1 Equity and
investment fund shares |
2.3 |
3.1 |
4.6 |
6.1 |
1.1 |
|
2.2 Debt Securities |
5.6 |
4.8 |
4.0 |
3.6 |
9.5 |
|
3. Other Investment |
80.6 |
76.8 |
84.5 |
76.5 |
91.1 |
|
3.1 Trade Credits |
5.6 |
7.9 |
11.8 |
12.9 |
18.6 |
|
3.2 Loans |
13.3 |
13.6 |
10.8 |
8.9 |
10.5 |
|
3.3 Currency and
Deposits |
42.4 |
35.9 |
42.3 |
34.8 |
42.1 |
|
3.4 Other Assets |
19.2 |
19.4 |
19.6 |
19.9 |
19.9 |
|
4. Reserve Assets |
577.0 |
611.1 |
635.4 |
633.6 |
607.3 |
|
B. Liabilities |
1,214.6 |
1,226.2 |
1,267.8 |
1,282.1 |
1,280.4 |
|
1. Direct Investment |
482.1 |
493.7 |
506.7 |
514.2 |
521.7 |
|
1.1 Equity and
investment fund shares |
456.9 |
468.0 |
480.7 |
487.9 |
494.0 |
|
1.2 Debt instruments |
25.2 |
25.7 |
26.0 |
26.3 |
27.7 |
|
2. Portfolio
Investment |
278.5 |
277.8 |
282.6 |
277.1 |
262.4 |
|
2.1 Equity and
investment fund shares |
177.3 |
176.2 |
177.0 |
172.8 |
156.4 |
|
2.2 Debt securities |
101.2 |
101.6 |
105.5 |
104.3 |
106.0 |
|
3. Other Investment |
454.0 |
454.7 |
478.5 |
490.8 |
496.4 |
|
3.1 Trade Credits |
100.3 |
102.1 |
104.4 |
113.5 |
118.2 |
|
3.2 Loans |
197.5 |
197.2 |
201.2 |
204.1 |
205.0 |
|
3.3 Currency and
Deposits |
143.8 |
143.1 |
142.9 |
143.5 |
141.0 |
|
3.4 Other Liabilities |
12.4 |
12.3 |
30.0 |
29.8 |
32.2 |
|
Memo item: Assets to
Liability Ratio (%) |
70.8 |
73.0 |
73.5 |
72.4 |
71.9 |
|
PR: Partially revised;
P: Provisional; |
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