Direct investment into country rises by USD 19 billion: RBI

Reserve Bank of India has said, direct investment into the country rose by USD 19 billion while portfolio investment declined by USD 13.7 billion during 2019-20.

According to the data on the International Investment Position (IIP) released by RBI, yesterday stated that international financial assets of Indian residents increased by USD 73.9 billion due to the rise in reserve assets and overseas direct investment by USD 64.9 billion and USD 13.0 billion, respectively.

Key Features of India's IIP as at end-March 2020:

Quarterly Variations (January-March, 2020):

1) Net claims of non-residents on India lowered by USD 45.8 billion to USD 379.3 billion in March 2020.

2) The decline in net foreign-owned assets in India was due to a reduction of USD 28.1 billion in the non-residents' assets combined with an increase of USD 17.7 billion in Indian residents' foreign assets.

3) Overseas assets of Indian residents' rose mainly due to a surge of USD 17.9 billion in reserve assets, supported by an increase in overseas direct investments even as other investments declined marginally during the quarter.

4) The fall in foreign-owned assets was largely due to a decline in the portfolio and direct investments in India by USD 20.1 billion and USD 8.7 billion, respectively, even as loans availed by residents [mainly, external commercial borrowings (ECBs)] increased during the quarter; depreciation of the Indian rupee against the US dollar contributed to the decline in foreign-owned assets in India when valued in US dollar terms.

5) Reserve assets accounted for around two-thirds of total foreign assets.

6) The share of debt liabilities in total liabilities increased during the quarter.

7) The ratio of India's international financial assets to international financial liabilities improved significantly to 65.4 per cent at end-March 2020 (62.1 per cent a quarter ago; 59.5 per cent a year ago).

Annual Variations (April-March, 2019-20)

1) International financial assets of Indian residents increased by USD 73.9 billion due to the rise in reserve assets and overseas direct investment by USD 64.9 billion and USD 13.0 billion, respectively, though other investments declined marginally during the year.

2) Despite a fall of USD 13.7 billion in portfolio investment during the year, international financial liabilities increased by USD 16.3 billion as direct investment and other investments rose by USD 19.0 billion and USD 11.0 billion, respectively.

3) Overall, net claims of non-residents on India declined by USD 57.6 billion during the year.

4) RBI said that though other investments declined marginally during the year. The RBI said that overall, net claims of non-residents on India declined by USD 57.6 billion during the year.

5) It said that despite a fall of USD 13.7 billion in portfolio investment during the year, international financial liabilities increased by USD 16.3 billion as direct investment and other investments rose by USD 19.0 billion and USD 11.0 billion, respectively.