Net claims of foreigners, NRIs up at $211 b. in Q2

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New Delhi: Net claims of foreigners and NRIs on India rose to $211.1 billion during July-September this fiscal year, up $33.2 billion over the previous quarter, as robust economic growth drew higher overseas investment.

Easier loans abroad also led to the bigger mop-up. The second quarter figure is a jump of 19 percent in the net assets of foreigners and NRIs, from $177.9 billion during the April-June quarter of 2010-11.

This was revealed by the RBI data on India’s International Investment Position (IIP), which represents the difference between assets held by residents and non-residents.

During the second quarter, total external financial assets of Indian residents increased $26.8 billion, or 7.15 percent, to $401.7 billion, the IIP figure showed. The total external financial assets in the first quarter were $374.9 billion.

Among the assets, direct investment abroad went up by $4.1 billion to $89.2 billion. Portfolio investment by Indians in the form of equity securities remained flat at $0.9 billion during the quarter ended September.

Other investments by Indians in the overseas markets, including trade credits, loans and currency and deposits, increased by $5.5 billion, or 42 percent, to $18.6 billion during the July-September quarter.

Loans also went up by $2.7 billion to $6.1 billion. Currency and deposits increased to $10.3 billion during the September quarter, up $2.4 billion from the first quarter. The reserve assets of the country rose by $17.2 billion to $292.9 billion. During July-September, the Indian economy expanded by 8.9 percent, even as advanced economies such as the US and many European nations grappled with sluggish growth. During the period, the country’s total external financial liabilities registered an increase of $60 billion, or 11 percent, to $612.8 billion. It was $552.8 billion for the quarter ended June 2010.

Direct investment into the country went up by $13.5 billion to $191.7 billion. Portfolio investment in the country during the quarter ended September also grew by $28.8 billion to $164.3 billion over the previous quarter. Liabilities in the nature of trade credits, loans, and currency and deposits cumulatively increased by $17.6 billion to $256.8 billion due to availability of funds at substantially lower interest rates than in the domestic markets. Loans to Indian companies went up $8.3 or 6.5 percent during the quarter ended September to $135.8 billion. During the July-September period, currency and deposits liabilities grew marginally to $50.5 billion.

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