India’s net international investment position (IIP) declined by $14.2 billion during the quarter ended June 30. 2011 over the previous quarter on account of rise in the international financial liabilities. According to the Reserve Bank of India, net claims of non-residents on India as reflected by the net IIP stood at US$ 233.6 billion in the first quarter March-June, 2011.
While the international financial assets were up by $11 billion at $435.6 billion, international financial liabilities also grew by $25.3 billion to stand at at $669 billion up during the reporting period.
International financial liabilities increased mainly due to the direct and portfolio investments in India by the non-residents showing an increase of $13.5 billion and $2.8 billion respectively, sequentially. Direct investment in India stood at $217.7 billion and portfolio investment into the country by the non-residents was $176.4 billion.
Out of the total international financial liabilities, the share of debt liabilities was 47.5 per cent and the balance were non-debt liabilities.
On the other hand, increase in the reserve assets led to an increase in the international financial assets . The reserve assets grew by $10.9 billion, sequentially to $315 billion by June end, 2011. Increase in the direct investment by Indians overseas was another reason for the increase in the assets. Direct investment grew by $5.7 billion to $103.9 billion during the reporting period.
