India’s international financial liabilities increased by 10.5 billion Dollars to 723.9 billion Dollars as at end- of December 2012 as per the India’s International Investment Position (IIP) Report Published by RBI in March 2013.
In the October-December 2012 period, international financial assets of Indian citizens remained unchanged at 441.9 billion Dollars.
Net claims of non-residents on India (as reflected by the Net IIP, i.e. International financial assets abroad less International financial liabilities) increased by 10.4 billion US dollars over the previous quarter to 282.0 billion US Dollar as at end-December 2012, mainly on account of 10.5 billion US Dollar increase in liabilities The changes in IIP also reflect the valuation changes emanating from exchange rate movements.
Due to rupee depreciation during end-September 2012 to end-December 2012 equity liabilities in US Dollars term revised downwards by US Dollars 13.2 billion (8.4 billion US Dollars in direct investment and 4.8 billion US Dollars in portfolio investment).
The ratio of India’s international financial assets to international financial liabilities decreased to 61.0 per cent in December 2012 (61.9 per cent in September 2012).
What is International investment position (IIP)?
International investment position is a statistical statement that shows the value and the composition of financial assets of residents of an economy and liabilities of residents of an economy to non-residents.
Such balance sheet analysis of international accounts helps in understanding sustainability and vulnerability of the economy.
The changes in international investment position of a country also reflect the valuation changes emanating from exchange rate movements.