Reserve Bank of India has released the statistical statement of the International Investment Position (IIP) of the quarter ended in September 2013. The statement shows following at a point in the time of the value and composition:
• Financial assets of residents of an economy that are claims on non-residents and gold bullion held as reserve assets
• Liabilities of residents of an economy to non-residents
The difference between an economy's external financial assets and liabilities is its net IIP. Such balance sheet is an analysis of international accounts that will help in understanding sustainability and vulnerability of economy’s external sector.
Important highlights of the International Investment Position (IIP) are following for the quarter-ended September 2013:
Net claims of non-residents on India (as reflected by the net IIP) decreased by US$ 12.8 billion over the previous quarter to 296.2 billion US dollars as at end-September 2013. This change in the net position reflected a US$ 10.6 billion decrease in the value of foreign-owned assets in India vis-à-vis a US$ 2.2 billion increase in the value of Indian Residents’ financial assets abroad (Table 1).
Indian residents’ financial assets abroad stood at 436.7 billion US dollars as at end-September 2013 recording a marginal increase of US$ 2.2 billion over previous quarter mainly due to increase of US$ 6.8 billion in other investment abroad including trade credit, loans and currency and deposits. Reserve assets, decreased by US$ 5.3 billion to US$ 277.2 billion as at end-September 2013. Direct investment increased marginally by US$ 0.6 billion.
Foreign-owned assets in India have decreased by 10.6 billion US dollars over the previous quarter to US$ 732.9 billion as at end-September 2013. The Direct investment in India has been reduced by 2.9 billion US dollars and portfolio investment in India has gone down by 13.3 billion US dollars. Among other investment liabilities, trade credit decreased by 1.9 billion US dollars and loans increased by 2.8 billion US dollars.
Effects of Rupee Depreciation: Variation in exchange rate of rupee vis-a-vis other currencies influenced change in liabilities, when valued in US dollars terms. Though there was a net inflow of US$ 6.6 billion during the period, equity liabilities in US dollars term decreased by 10.2 billion US dollars, from 340.7 billion US dollars in June 2013 to 330.5 billion US dollars in September 2013 due to the stock valuation effect resulting from rupee depreciation.
| Overall International Investment Position of India | |||||
| (billion US dollar) | |||||
| Period | Sep12- (PR) | Dec-12 (PR) | Mar-13 (PR) | Jun-13 (PR) | Sep-13 (P) |
| Net IIP | -286.1 | -296.7 | -317.6 | -309.0 | -296.2 |
| A. Assets | 442.6 | 443.9 | 447.8 | 434.5 | 436.7 |
| 1. Direct Investment | 115.8 | 118.1 | 119.5 | 119.5 | 120.1 |
| 2. Portfolio Investment | 1.5 | 1.5 | 1.4 | 1.4 | 1.4 |
| 2.1 Equity Securities | 1.5 | 1.4 | 1.3 | 1.2 | 1.2 |
| 2.2 Debt Securities | 0.1 | 0.1 | 0.1 | 0.2 | 0.2 |
| 3. Other Investment | 30.4 | 28.7 | 34.8 | 31.2 | 38.0 |
| 3.1 Trade Credits | 6.9 | 5.7 | 3.9 | 6.3 | 8.2 |
| 3.2 Loans | 3.7 | 3.5 | 4.9 | 3.7 | 5.7 |
| 3.3 Currency & Deposits | 7.8 | 6.9 | 13.1 | 8.0 | 10.8 |
| 3.4 Other Assets | 12.0 | 12.6 | 12.9 | 13.3 | 13.3 |
| 4. Reserve Assets | 294.8 | 295.6 | 292.1 | 282.5 | 277.2 |
| B. Liabilities | 728.7 | 740.6 | 765.3 | 743.5 | 732.9 |
| 1. Direct Investment | 228.9 | 225.0 | 233.7 | 219.8 | 216.9 |
| 2. Portfolio Investment | 180.9 | 185.8 | 192.2 | 182.5 | 169.2 |
| 2.1 Equity Securities | 125.7 | 128.9 | 139.5 | 131.6 | 124.3 |
| 2.2 Debt securities | 55.2 | 56.9 | 52.8 | 50.8 | 44.9 |
| 3. Other Investment | 318.9 | 329.8 | 339.4 | 341.3 | 346.8 |
| 3.1 Trade Credits | 76.9 | 84.6 | 89.0 | 91.4 | 89.5 |
| 3.2 Loans | 164.4 | 165.4 | 166.8 | 166.2 | 169.0 |
| 3.3 Currency & Deposits | 67.2 | 67.8 | 71.0 | 71.3 | 75.2 |
| 3.4 Other Liabilities | 10.3 | 12.0 | 12.6 | 12.3 | 13.1 |
| Memo item: Assets to Liability Ratio (%) | 60.7 | 59.9 | 58.5 | 58.4 | 59.6 |
| PR: Partially revised P: Provisional The sum of the constituent items may not add to the total due to rounding off. | |||||
Composition of External Financial Assets and Liabilities: Reserve Assets continued to have the dominant share (63.5 percent) in India’s international financial assets in September 2013, followed by direct investment abroad (27.5 percent). Direct Investment (29.6 percent), portfolio investment (23.1 percent), loans (mainly ECBs) (23.1 percent), trade credit (12.2 percent) and currency and deposits (10.3 percent) were the major constituents of the country’s financial liabilities.
| Composition of International Financial Assets and Liabilities of India | |||||
| (percent) | |||||
| Period | Sep-12 (PR) | Dec-12 (PR) | Mar-13 (PR) | Jun-13 (PR) | Sep-13 (P) |
| A. Assets |
|
|
|
|
|
| 1. Direct Investment | 26.2 | 26.6 | 26.7 | 27.5 | 27.5 |
| 2. Portfolio Investment | 0.4 | 0.3 | 0.3 | 0.3 | 0.3 |
| 3. Other Investment | 6.9 | 6.5 | 7.8 | 7.2 | 8.7 |
| 4. Reserve Assets | 66.6 | 66.6 | 65.2 | 65.0 | 63.5 |
| Assets/Liabilities | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 |
| B. Liabilities | |||||
| 1. Direct Investment | 31.4 | 30.4 | 30.5 | 29.6 | 29.6 |
| 2. Portfolio Investment | 24.8 | 25.1 | 25.1 | 24.5 | 23.1 |
| 3. Other Investment | 43.8 | 44.5 | 44.4 | 45.9 | 47.3 |
External Debt Liabilities vis-a-vis External Non-Debt Liabilities: The share of non-debt liabilities decreased marginally to 45.1 per cent as at end-September 2013 from 45.8 percent at end-June 2013.
| Share of External Debt and Non-Debt Liabilities of India | |||||
| (percent) | |||||
| Period | Sep-12 (PR) | Dec-12 (PR) | Mar-13 (PR) | Jun-13 (PR) | Sep-13 (P) |
| Non-Debt Liabilities | 47.3 | 46.4 | 47.4 | 45.8 | 45.1 |
| Debt Liabilities | 52.7 | 53.6 | 52.6 | 54.2 | 54.9 |
| Total | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 |
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