India's foreign assets increased more than liabilities in 2023-24: RBI data

India increased its overseas assets more than it increased its foreign liabilities, largely due to a rise in reserve assets.

India's has increased its overseas assets more than its foreign liabilities, largely due to a rise in reserve assets, according to Reserve Bank of India (RBI) data. Reserve assets accounted for 62.9% of India’s international financial assets in March 2024.

What are reserve assets?

Reserve assets are assets such as foreign currencies or gold, that are liquid and can be easily accepted and transferred, especially across countries.

Reserve assets amounting to $23.9 billion ( ₹1.99 lakh crore) was the dominant component of the rise in Indian residents’ overseas financial assets during the last quarter of the financial year 2023-24, followed by currency and deposits, and overseas direct investments, according to the RBI's press release.

What about India's foreign liabilities?

Most of the rise in foreign liabilities was due to inward portfolio investments, direct investments, and loans, which made up over three-quarters of the total increase in foreign liabilities during the year.

The ratio of India's international financial assets to its international financial liabilities improved however, reaching 74% in March 2024, compared to 71.4% in March 2023.

The RBI also mentioned that relative to the Gross Domestic Product (GDP) at current market prices, both India's reserve assets and the overseas financial assets and liabilities of residents increased during the financial year 2023-24.

The ratio of net claims of non-residents on India to GDP improved to -10.3% in March 2024 from -11.3% a year ago, and 11.6% two years ago. However, India’s reserve assets and residents’ overseas financial assets as well as liabilities both increased as a ratio to GDP.

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