New Delhi [India], India's financial position relative to the rest of the world improved throughout the year. The country increased its foreign assets more than it increased its external liabilities, largely due to an increase in reserve assets, according to data from the Reserve Bank of India.
During the financial year 2023-24, non-resident net claims on India decreased by $5.5 billion. This happened because India's external financial assets grew by $109.8 billion, a figure greater than the increase in its external financial liabilities, which grew by $104.3 billion.
A significant portion of the increase in overseas financial assets held by Indian residents came from reserve assets, which accounted for 62 per cent of the total increase. Other important contributors were cash and deposits, and foreign direct investments.
Most of the increase in external liabilities was due to portfolio investments, direct investments and loans. These components accounted for more than three-quarters of the total increase in external liabilities during the year. The change in the value of the Indian rupee against other currencies also affected the change in liabilities when they were valued in US dollars.
The ratio of India's international financial assets to its international financial liabilities improved, reaching 74 percent in March 2024, up from 71.4 percent in March 2023.
The RBI also mentioned that relative to the Gross Domestic Product (GDP) at current market prices, both India's reserve assets and overseas financial assets and liabilities of residents increased during the financial year 2023-24. .
Investments coming into India in the form of portfolios, direct investments and loans were the main reasons for the increase in external liabilities. India's overall financial health relative to its economy also showed improvement, with an improved asset-liability ratio and a decline in non-resident net assets compared to GDP.
During the financial year 2023-24, non-resident net claims on India decreased by $5.5 billion. This happened because India's external financial assets grew by $109.8 billion, a figure greater than the increase in its external financial liabilities, which grew by $104.3 billion.
A significant portion of the increase in overseas financial assets held by Indian residents came from reserve assets, which accounted for 62 per cent of the total increase. Other important contributors were cash and deposits, and foreign direct investments.
Most of the increase in external liabilities was due to portfolio investments, direct investments and loans. These components accounted for more than three-quarters of the total increase in external liabilities during the year. The change in the value of the Indian rupee against other currencies also affected the change in liabilities when they were valued in US dollars.
The ratio of India's international financial assets to its international financial liabilities improved, reaching 74 percent in March 2024, up from 71.4 percent in March 2023.
The RBI also mentioned that relative to the Gross Domestic Product (GDP) at current market prices, both India's reserve assets and overseas financial assets and liabilities of residents increased during the financial year 2023-24. .
Investments coming into India in the form of portfolios, direct investments and loans were the main reasons for the increase in external liabilities. India's overall financial health relative to its economy also showed improvement, with an improved asset-liability ratio and a decline in non-resident net assets compared to GDP.
