Overseas claims on India’s financial assets down $19.8 bn at $348.5 bn in Q2 FY25
02 Jan 2025
Net claims of non-residents on India declined by $19.8 billion to $348.5 billion during fiscal second quarter ended 30 September 2024, leading to an improvement in India’s International Investment Position (IIP), according to the Reserve Bank of India (RBI).
During the quarter, Indian residents’ overseas financial assets increased by $66.5 billion compared with a $46.7 billion increase in foreign-owned assets in India, leading to a decline in net claims of non-residents during the quarter.
Over 80 per cent of the increase in overseas financial assets during July-September 2024 was due to the dollar surge in India’s reserve assets, which shot up to $53.8 billion.
Foreign exchange reserves with the RBI accounted for 63 per cent of India’s total international financial assets in September 2024.
Over two-thirds of the incremental foreign liabilities of Indian residents was due to a spike in foreign portfolio investments to $16.5 billion and increase in overseas loans amounting to $15.4 billion during the quarter.
The July-September 2024-25 quarter also saw the share of debt liabilities in total external liabilities rising to 52.7 per cent from 51.1 per cent a year ago.
A strong dollar also had its impact on the exchange rate of rupee vis-a-vis other currencies in India’s overseas liabilities, valued in dollar terms.
During Q2 FY25, the ratio of India’s international assets to international liabilities stood higher at 76.2 per cent against 74.1 per cent in the previous quarter and 71.4 per cent in the year-ago quarter.
