The Reserve Bank of India (RBI) has released the latest data on India’s International Investment Position (IIP) for the quarter ending December 2024, indicating a marginal improvement in net IIP to -US$ 364.5 billion, compared to -US$ 368.1 billion a year earlier.
Key highlights from the RBI report:
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Net claims of non-residents on India increased by US$ 11 billion during the third quarter of FY2024-25, bringing the total to US$ 364.5 billion.
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Foreign assets held by Indian residents declined by US$ 40.1 billion, largely due to a significant US$ 70.1 billion fall in reserve assets.
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Simultaneously, the claims of non-residents on India dropped by US$ 29.1 billion, reflecting in a rise in net foreign liabilities.
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Reserve assets rose by US$ 13.2 billion on a year-over-year basis, contributing to 59% of India’s total international assets.
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India’s foreign liabilities fell primarily due to a decline in direct and portfolio investment inflows, although currency deposits and trade credits recorded marginal increases.
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The assets-to-liabilities ratio improved to 74.7% in December 2024 from 73.1% in December 2023.
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The share of debt liabilities in total external liabilities jumped to 53.6%, up from 52.9% in the previous quarter and 51.2% in the same quarter last year.
Composition breakdown:
According to Table 1, India’s total international assets stood at US$ 1,078.7 billion, while total liabilities were US$ 1,443.2 billion. Direct investments by Indian residents rose to US$ 260.2 billion, while portfolio investments slightly increased to US$ 12.2 billion.
Meanwhile, the reserve assets saw a quarterly dip but maintained a strong base at US$ 635.7 billion. Liabilities from direct investment stood at US$ 547.6 billion, and portfolio investment liabilities at US$ 276.0 billion.
Table 3 highlights that non-debt liabilities reduced to 46.4% of total liabilities, further emphasizing the growing dominance of debt-driven financing in India’s external obligations.
