According to RBI data, India’s Net International Investment Position (IIP) has improved significantly in the March 2026 quarter. During this period, the net claims of non-residents on the country have declined by $52.4 billion to $209.9 billion.
Mumbai (Maharashtra) [भारत]June 30 (ANI): India’s Net International Investment Position (IIP) has improved significantly during the January-March quarter of financial year 2025-26, according to data released by the Reserve Bank of India (RBI) on Tuesday. By the end of March 2026, net claims by non-residents on the country declined by $52.4 billion to $209.9 billion.
The improvement was driven by a $40.1 billion decline in foreign-owned assets in India as well as a $12.3 billion increase in foreign financial assets held by Indian residents. RBI said exchange rate fluctuations, especially the depreciation of the rupee against major currencies, also affected the valuation of external liabilities in US dollar terms.
Key figures of the quarter
The decline in foreign liabilities was mainly due to decline in portfolio investment and direct investment in India. The central bank said that even though inward foreign direct investment increased in rupee terms, its value declined in US dollar terms due to the fall in the exchange rate.
On the assets side, foreign direct investments accounted for more than 60 per cent of the increase in foreign financial assets of Indian residents during the quarter, followed by reserve assets.
Reserve assets dominated India’s international financial assets, accounting for 57.1 percent of total assets, while foreign direct investment contributed about one-quarter.
The ratio of India’s international financial assets to international financial liabilities improved to 85.2 percent at the end of March 2026 from 82 percent at the end of December 2025. This reflects the strength of the country’s external balance sheet.
However, the share of debt liabilities in India’s total external liabilities continued to increase and reached 56.6 percent at the end of March 2026.
Performance for the entire financial year 2025-26
For the entire financial year 2025-26, the RBI said net claims by non-residents declined by $119.2 billion. This was supported by a $42.8 billion decline in external financial liabilities, mainly due to the depreciation of the rupee against the US dollar, and an increase in foreign financial assets of Indian residents by $76.4 billion.
The central bank said the annual increase in foreign financial assets was mainly due to higher foreign direct investment and reserve assets, while India’s external liabilities declined due to lower portfolio and direct investment by non-residents.
As a result, the ratio of India’s international financial assets to international financial liabilities increased to 85.2 per cent in March 2026 from 77.5 per cent a year ago. The ratio of net claims of non-residents on India to GDP also improved from (-)9.0 per cent to (-)5.9 per cent in March 2025, indicating a strong external position. (ANI)
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