New Delhi, September 28
Net claims of non-residents on India increased by $12.1 billion during the first quarter of the current fiscal (April to June) and stood at $379.7 billion as of June-end.
At June-end this year, India’s external debt was placed at $629.1 billion, recording an increase of $4.7 billion over its level at end-March 2023, according to the RBI.
The US dollar-denominated debt remained the largest component of India’s external debt, with a share of 54.4 per cent at June-end, followed by debt denominated in the Indian rupee (30.4 per cent), SDR (5.9 per cent), yen (5.7 per cent) and euro (3.0 per cent).
However, external debt would have increased by $7.8 billion instead of $4.7 billion if the valuation effect due to the appreciation of the US dollar vis-à-vis the major currencies was excluded. This valuation effect amounted to $3.1 billion.
The rise in net claims of non-residents during the quarter was on account of higher rise in foreign-owned financial assets in India ($36.2 billion) when compared with Indian residents’ overseas financial assets ($24.1 billion).
Inward portfolio investment ($15 billion) and foreign direct investment ($8.9 billion) together accounted for two thirds of the rise in foreign liabilities of Indian residents. Increase in reserve assets was the largest contributor to the rise in Indian residents’ foreign assets during April-June, followed by direct investment, loans and trade credit. Reserve assets alone stood at $16.6 billion. Total overseas financial assets were at $926.8 billion at the end of the first quarter of 2023-24 as against liabilities of $1,306 billion.
The ratio of India’s international assets to international liabilities moderated to 70.9 per cent in June 2023 from 71.1 per cent a quarter ago and 71.5 per cent a year ago.
At end-June 2023, long-term debt was placed at $505.5 billion, recording an increase of $9.6 billion over its level at March-end. The share of short-term debt in total external debt declined to 19.6 per cent at June-end 2023 from 20.6 per cent at March-end.
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