Reserve Bank of India

Reserve Bank released data relating to India’s International Investment Position as at end-March 2020.

Today, the Reserve Bank released data relating to India’s International Investment Position as at end-March 2020.

Key Features

I. Quarterly Variations (January-March, 2020):

  • Net claims of non-residents on India lowered by US$ 45.8 billion to US$ 379.3 billion in March 2020 (Table 1).
  • The decline in net foreign owned assets in India was due to a reduction of US$ 28.1 billion in the non-residents’ assets combined with an increase of US$ 17.7 billion in Indian residents’ foreign assets.
  • Overseas assets of Indian residents’ rose mainly due to a surge of US$ 17.9 billion in reserve assets, supported by an increase in overseas direct investments even as other investments declined marginally during the quarter.
  • The fall in foreign-owned assets was largely due to decline in portfolio and direct investments in India by US$ 20.1 billion and US$ 8.7 billion, respectively, even as loans availed by residents [mainly, external commercial borrowings (ECBs)] increased during the quarter; depreciation of the Indian rupee against the US dollar contributed to the decline in foreign-owned assets in India, when valued in US dollar terms.
  • Reserve assets accounted for around two-thirds of total foreign assets (Table 3).
  • The share of debt liabilities in total liabilities increased during the quarter (Table 4).
  • The ratio of India’s international financial assets to international financial liabilities improved significantly to 65.4 per cent at end-March 2020 (62.1 per cent a quarter ago; 59.5 per cent a year ago).

II. Annual Variations (April-March, 2019-20)

  • International financial assets of Indian residents increased by US$ 73.9 billion due to the rise in reserve assets and overseas direct investment by US$ 64.9 billion and US$ 13.0 billion, respectively, though other investments declined marginally during the year (Table 1).
  • Despite a fall of US$ 13.7 billion in portfolio investment during the year, international financial liabilities increased by US$ 16.3 billion as direct investment and other investments rose by US$ 19.0 billion and US$ 11.0 billion, respectively.
  • Overall, net claims of non-residents on India declined by US$ 57.6 billion during the year.

III. Ratio of International Financial Assets and Liabilities to GDP

  • The ratio of overseas financial assets to India’s GDP in 2019-20 (at current market prices) moved up to 26.5 per cent in March 2020 (23.4 per cent a year ago) (Table 2).
  • The ratio of total claims of non-residents to GDP increased to 40.5 per cent in March 2020 (39.3 per cent a year ago).
  • The ratio of net IIP to GDP improved to (-)14.0 per cent as at end-March 2020 [(-)15.9 per cent].

(Yogesh Dayal)
Chief General Manager

Press Release: 2019-2020/2571

 

Table 1: Overall International Investment Position of India
(US $ billion)
Period Mar-19 (R) Jun-19 (PR) Sep-19 (PR) Dec-19 (PR) Mar-20 (P)
Net IIP -436.9 -451.6 -436.5 -425.1 -379.3
A. Assets 641.7 662.2 669.5 697.9 715.6
1. Direct Investment 170.0 173.2 176.2 179.7 183.0
2. Portfolio Investment 4.7 5.0 4.5 4.8 3.8
   2.1 Equity Securities 0.6 1.8 2.3 2.6 0.6
   2.2 Debt Securities 4.1 3.2 2.2 2.2 3.2
3. Other Investment 54.2 54.1 55.0 53.4 51.0
   3.1 Trade Credits 0.9 2.1 1.6 2.2 1.5
   3.2 Loans 9.9 9.8 7.9 6.2 6.7
   3.3 Currency and Deposits 25.2 24.2 27.6 27.1 26.0
   3.4 Other Assets 18.2 18.1 17.9 17.9 16.8
4. Reserve Assets 412.9 429.8 433.7 459.9 477.8
B. Liabilities 1078.6 1113.8 1106.0 1123.0 1094.9
1. Direct Investment 399.2 417.6 417.1 426.9 418.2
2. Portfolio Investment 260.3 266.8 260.0 266.7 246.6
   2.1 Equity Securities 147.5 151.2 144.0 148.9 134.8
   2.2 Debt securities 112.8 115.6 116.0 117.8 111.8
3. Other Investment 419.1 429.3 428.9 429.3 430.1
   3.1 Trade Credits 105.2 107.2 106.6 105.2 104.3
   3.2 Loans 167.9 173.7 174.8 177.3 180.0
   3.3 Currency and Deposits 130.6 133.8 133.1 133.3 130.8
   3.4 Other Liabilities 15.3 14.5 14.4 13.5 15.0
Memo item: Assets to Liability Ratio (%) 59.5 59.5 60.5 62.1 65.4
R: Revised    PR: Partially revised    P: Provisional;
The sum of the constituent items may not add to the total due to rounding off.

 

Table 2: Ratios of External Financial Assets and Liabilities to GDP
(per cent)
Period Mar-18 (R) Mar-19 (PR) Mar-20 (P)
Net IIP (Assets – Liabilities) -15.9 -15.9 -14.0
A. Assets 24.1 23.4 26.5
1. Direct Investment Abroad 6.0 6.2 6.8
2. Portfolio Investment 0.2 0.2 0.1
   2.1 Equity Securities 0.1
   2.2 Debt Securities 0.1 0.2 0.1
3. Other Investment 1.8 2.0 1.9
   3.1 Trade Credits 0.1 0.0 0.0
   3.2 Loans 0.3 0.4 0.2
   3.3 Currency and Deposits 0.8 0.9 1.0
   3.4 Other Assets 0.7 0.7 0.6
4. Reserve Assets 16.1 15.1 17.7
B. Liabilities 40.0 39.3 40.5
1. Direct Investment in India 14.4 14.6 15.5
2. Portfolio Investment 10.4 9.5 9.1
   2.1 Equity Securities 5.9 5.4 5.0
   2.2 Debt securities 4.5 4.1 4.1
3. Other Investment 15.3 15.3 15.9
   3.1 Trade Credits 3.9 3.8 3.9
   3.2 Loans 6.1 6.1 6.7
   3.3 Currency and Deposits 4.8 4.8 4.8
   3.4 Other Liabilities 0.4 0.6 0.6
Note – : Negligible.

 

Table 3: Composition of International Financial Assets and Liabilities of India
(per cent)
Period Mar-19 (R) Jun-19 (PR) Sep-19 (PR) Dec-19 (PR) Mar-20 (P)
A. Assets
1. Direct Investment 26.5 26.1 26.3 25.7 25.6
2. Portfolio Investment 0.7 0.8 0.7 0.7 0.5
3. Other Investment 8.5 8.2 8.2 7.7 7.1
4. Reserve Assets 64.3 64.9 64.8 65.9 66.8
Assets/Liabilities 100.0 100.0 100.0 100.0 100.0
B. Liabilities
1. Direct Investment 37.0 37.5 37.7 38.0 38.2
2. Portfolio Investment 24.1 24.0 23.5 23.8 22.5
3. Other Investment 38.9 38.5 38.8 38.2 39.3

 

Table 4: Share of External Debt and Non-Debt Liabilities of India
(per cent)
Period Mar-19 (R) Jun-19 (PR) Sep-19 (PR) Dec-19 (PR) Mar-20 (P)
Non-Debt Liabilities 49.1 49.5 49.1 49.3 48.4
Debt Liabilities 50.9 50.5 50.9 50.7 51.6
Total 100.0 100.0 100.0 100.0 100.0

1India’s quarterly IIP is disseminated with a one- quarter lag. The IIP for end- December 2019 was placed in the public domain on March 31, 2020

Sources of Data

Annex – I: Sources of Data

(1) Survey of India’s Foreign Liabilities & Assets

(2) Balance held abroad by Government (Embassies’ Balances) (Government YEN balances);

(3) Loans to foreign Government (Budgetary Documents)

(4) Head office funds of the overseas branches of Indian Scheduled Commercial banks.

(5) Subscription to International Monetary Fund (International Financial Statistics).

(6) Banking Assets & Liabilities (BAL) Statement.

(7) Statement of Non-resident Rupees Accounts maintained with RBI.

(8) India’s External Debt – A Status Report/ Annual Report, Quarterly Statement.

(9) Balance of Payment (BoP) Data.

(10) International Banking Statistics (IBS).

(11) Data Template on International Reserves & Foreign Currency Liquidity.

(12) Annual Reports of International Institutions.

(13) External Commercial Borrowings

(14) Export Proceeds Not Realized (BOP)


Annex-II: Item-wise Sources of Data

International Investment Position  
(Standard Components as per BOPM5)  
Item SOURCE OF IIP DATA
A. Assets
1. Direct investment abroad
1.1 Equity capital and reinvested earnings
1.1.1 Claims on affiliated enterprises RBI Bulletin BOP Statement
1.1.2 Liabilities to affiliated enterprises
1.2 Other capital
1.2.1 Claims on affiliated enterprises RBI Bulletin BOP Statement
1.2.2 Liabilities to affiliated enterprises
2. Portfolio investment
2.1 Equity securities
2.1.1 Monetary authorities
2.1.2 General government
2.1.3 Banks Locational Banking Statistics
2.1.4 Other sectors $ FLA Survey Data
2.2 Debt securities
2.2.1 Bonds and notes
2.2.1.1 Monetary authorities
2.2.1.2 General government
2.2.1.3 Banks Locational Banking Statistics
2.2.1.4 Other sectors $ FLA Survey Data
2.2.2 Money market instruments
2.2.2.1 Monetary authorities
2.2.2.2 General government
2.2.2.3 Banks Locational Banking Statistics
2.2.2.4 Other sectors
3. Financial derivatives
3.1 Monetary authorities
3.2 General government
3.3 Banks
3.4 Other sectors
4. Other investment
4.1 Trade credits
4.1.1 General government
4.1.1.1 Long-term
4.1.1.2 Short-term
4.1.2 Other sectors
4.1.2.1 Long-term
4.1.2.2 Short-term Data pertains to Export proceeds not realized by Corporate Sector
4.2. Loans
4.2.1 Monetary authorities
4.2.1.1 Long-term
4.2.1.2 Short-term
4.2.2 General government
4.2.2.1 Long-term Budget Documents, Partition debt payable by Pakistan
4.2.2.2 Short-term
4.2.3 Banks
4.2.3.1 Long-term BAL Statement
4.2.3.2 Short-term
4.2.4 Other sectors
4.2.4.1 Long-term $ FLA Survey Data
4.2.4.2 Short-term
4.3 Currency and deposits
4.3.1 Monetary authorities
4.3.2 General government Balances held abroad by embassies of India
4.3.3 Banks BAL Statement
4.3.4 Other sectors $ FLA Survey Data
4.4 Other assets
4.4.1 Monetary authorities
4.4.1.1 Long-term
4.4.1.2 Short-term
4.4.2 General government
4.4.2.1 Long-term Annual Reports of International Institutions
4.4.2.2 Short-term
4.4.3 Banks
4.4.3.1 Long-term BAL Statement and Head office funds of the overseas branches of Indian Scheduled Commercial banks
4.4.3.2 Short-term
4.4.4 Other sectors
4.4.4.1 Long-term $ FLA Survey Data
4.4.4.2 Short-term
5. Reserve assets
5.1 Monetary gold RBI Bulletin
5.2 Special drawing rights -do-
5.3 Reserve position in the Fund -do-
5.4 Foreign exchange Assets -do-
5.4.1 Currency and deposits Data in the template on International Reserves/Foreign Currency Liquidity
5.4.1.1 With monetary authorities -do-
5.4.1.2 With banks -do-
5.4.2 Securities -do-
5.4.2.1 Equities
5.4.2.2 Bonds and notes
5.4.2.3 Money market instruments and financial derivatives
5.4.3 Financial Derivatives (net)
5.5 Other claims
B. Liabilities
1. Direct investment in reporting economy
1.1 Equity capital and reinvested earnings $$ RBI Bulletin – BOP Statement-Direct investments in India
1.1.1 Claims on direct investors
1.1.2 Liabilities to direct investors
1.2 Other capital
1.2.1 Claims on direct investors
1.2.2 Liabilities to direct investors $$$ FDI Loans – External Commercial Borrowings
2. Portfolio investment
2.1 Equity securities
2.1.1 Banks @@
2.1.2 Other sectors $$ RBI Bulletin – BOP Statement-Portfolio investment in India.
2.2 Debt securities
2.2.1 Bonds and notes
2.2.1.1 Monetary authorities
2.2.1.2 General government Statement on Non-resident Rupees Accounts maintained with RBI
2.2.1.3 Banks Securitised external commercial borrowings raised by banks
2.2.1.4 Other sectors ## India’s External Debt : A Status Paper/Quarterly Statement (Securitised external commercial borrowings)
2.2.2 Money market instruments
2.2.2.1 Monetary authorities
2.2.2.2 General government Statement on Non-resident Rupees Accounts maintained with RBI (Treasury Bills)+ FII Investments in Govt. Treasury Bills (India’s External Debt : A Status Paper/Quarterly Statement)
2.2.2.3 Banks
2.2.2.4 Other sectors
3. Financial derivatives
3.1 Monetary authorities
3.2 General government
3.3 Banks
3.4 Other sectors
4. Other investment
4.1 Trade credits
4.1.1 General government
4.1.1.1 Long-term India’s External Debt: A Status Report/Quarterly Statement – Export Credit component of bilateral credit
4.1.1.2 Short-term
4.1.2 Other sectors
4.1.2.1 Long-term India’s External Debt : A Status Report/Quarterly Statement Suppliers’ credit, Credit for defence purchases
4.1.2.2 Short-term * India’s External Debt: A Status Report/Quarterly Statement: Short-Term Debt Others (trade related) Short-term Debt up to 6 months, above 6 months and up to 1 year
4.2 Loans
4.2.1 Monetary authorities
4.2.1.1 Use of Fund credit and loans from the Fund International Financial Statistics (IFS): Page 534 : India : Liabilities to IMF excluding SDR allocation
4.2.1.2 Other long-term
4.2.1.3 Short-term
4.2.2 General government
4.2.2.1 Long-term India’s External Debt: A Status Report/Quarterly Statement /
4.2.2.2 Short-term
4.2.3 Banks
4.2.3.1 Long-term India’s External Debt: A Status Report/Quarterly Statement/ RBI Bulletin
4.2.3.2 Short-term
4.2.4 Other sectors
4.2.4.1 Long-term ** India’s External Debt: A Status Report/Quarterly Statement
4.2.4.2 Short-term
4.3 Currency and deposits
4.3.1 Monetary authorities India’s External Debt: A Status Report/Quarterly Statement (Short Term External Debt Liabilities of Central Bank)
4.3.2 General government
4.3.3 Banks @ India’s External Debt: A Status Report/Quarterly Statement
4.3.4 Other sectors
4.4 Other liabilities
4.4.1 Monetary authorities
4.4.1.1 Long-term
4.4.1.2 Short-term
4.4.2 General government
4.4.2.1 Long-term # India’s External Debt: A Status Report/Quarterly Statement
4.4.2.2 Short-term
4.4.3 Banks
4.4.3.1 Long-term
4.4.3.2 Short-term India’s External Debt: A Status Report/Quarterly Statement – (External Debt Liabilities of banking system)
4.4.4 Other sectors
4.4.4.1 Long-term
4.4.4.2 Short-term $ FLA Survey Data
R : Data are Revised
PR : Data are Partially Revised.
P : Data are Provisional.
$ : Based on survey on Foreign Liabilities & Assets
$$ : Foreign Direct Investment (FDI) & Portfolio Investment are not adjusted for price changes.
$$$ : All liabilities (other than equity) between direct investor & direct investment enterprises are treated as other capital.
@ : Include accrued interest
* : Suppliers Credit upto 180 days are included.
** : Includes Buyers’ Credit. Loan transactions between direct investor & direct investment enterprises are treated as other capital.
## : Include Foreign Currency Convertible Bonds.
@@: Equity Investments in Banks by Non-residents included under FDI.
#:: Includes SDRs 3,082.5 million allocated under general allocation and SDRs 214.6 million allocated under special allocation by the IMF done on August 28, 2009 and September 9, 2009, respectively.
Note: i) NRO deposits are included under NRI deposits from the quarter ending June 2005. Supplier’s Credits upto 180 days and FII investment in short term debt instruments are included under short term debt from the quarter ending March 2005.
ii) Vostro credit balance is included in the liabilities of banking system under Other Liabilities, since September 2006
iii) As per BPM6, SDR allocation is treated as debt liability