Net Claims Of Non-Residents On India Declined By $19.8 Bn In Q2: RBI

Variation in the exchange rate of rupee vis-à-vis other currencies impacted the change in liabilities when valued in US dollar terms

The net claims of non-residents on India declined by $19.8 billion to touch $348.5 bil-lion in September in the second quarter of the current financial year, according to RBI data that was released on Monday.

Higher rise in Indian residents' overseas financial assets ($66.5 billion) compared to that in the foreign-owned assets in India ($46.7 billion) led to a decline in net claims of non-residents during the quarter. Net claims of non-residents on India are the differ-ence between the assets and liabilities held by non-residents in India.

"Over 80 per cent of the increase in overseas financial assets during July-September 2024 was due to the surge of $53.8 billion in the reserve assets," said the data on 'In-dia's International Investment Position (IIP), September 2024'.

The RBI further said the rise in inward portfolio investment ($16.5 billion) and loans ($15.4 billion) together accounted for over two-thirds of the rise in foreign liabilities of Indian residents during the quarter. Variation in the exchange rate of rupee vis-à-vis other currencies impacted the change in liabilities when valued in US dollar terms.

Further, the ratio of India's international assets to international liabilities improved to 76.2 per cent in September from 74.1 per cent a quarter ago and 71.4 per cent a year ago.

The share of debt liabilities in total external liabilities increased to 52.7 per cent in September 2024 from 51.1 per cent a year ago, the central bank said.