Mumbai: According to the latest report from the Reserve Bank of India (RBI), India’s external assets have outpaced its liabilities between June 2023 and June 2024.
The report details India’s International Investment Position (IIP) as of the end of June 2024, revealing that external assets rose by USD 108.4 billion, while external liabilities increased by USD 97.7 billion. It stated, “During the period between end-June 2023 and end-June 2024, the external assets increased by USD 108.4 billion and external liabilities increased by USD 97.7 billion.”
Despite the growth in assets, India’s net IIP, which measures the difference between external assets and liabilities, remained negative at USD 368.3 billion at the end of June 2024. This figure marks an improvement from the negative net IIP of USD 379.0 billion recorded at the end of June 2023, indicating a narrowing gap as external assets have grown more rapidly than liabilities.
The RBI report also provided insights into the composition of India’s foreign currency assets (FCA), which are part of the country’s external reserves. These assets are diversified across multiple currencies and asset portfolios, adhering to international best practices. A significant portion, USD 515.30 billion, or 83.51%, of the FCA was invested in securities, which supports stability and long-term growth. Additionally, USD 60.11 billion, or 9.74%, was held in deposits with other central banks and the Bank for International Settlements (BIS).
The report highlighted that as of the end of September 2024, out of the total FCA of USD 617.07 billion, USD 515.30 billion was invested in securities, while USD 60.11 billion was deposited with other central banks. This allocation aids in maintaining liquidity and acts as a reliable reserve for India’s foreign exchange needs.
Overall, the report underscores a positive trend in India’s external financial position, with assets growing at a faster rate than liabilities, which has helped reduce the negative net IIP year-on-year.
