India's net non-resident claims fall to $209.9bn
The Reserve Bank of India announced that net claims of non-residents on India decreased by US$ 52.4 billion in Q4:2025-26, reaching US$ 209.9 billion by end-March 2026. This decline was driven by a reduction in foreign-owned assets and a rise in Indian residents' overseas financial assets.
Shifting external financial landscape
Net claims of non-residents on India declined by US$ 52.4 billion during January-March 2026, settling at US$ 209.9 billion by end-March.
This was primarily due to a US$ 40.1 billion decrease in foreign-owned assets in India, alongside a US$ 12.3 billion increase in Indian residents' overseas financial assets.
The decline in foreign liabilities was mainly attributed to reduced portfolio investment and direct investment in India.
While inward direct investment measured in rupee terms increased, its US dollar value fell due to exchange rate depreciation.
Overseas direct investment accounted for over 60 percent of the rise in Indian residents' overseas financial assets during the quarter, followed by reserve assets.
Reserve assets constituted 57.1 percent of India's international financial assets, with overseas direct investment holding a one-fourth share.
Annual trends and key ratios
For the full fiscal year 2025-26, India's net claims of non-residents declined by US$ 119.2 billion.
This annual improvement was driven by a US$ 42.8 billion decrease in external financial liabilities, influenced by rupee depreciation, and a US$ 76.4 billion rise in Indian residents' overseas financial assets.
The ratio of India's international assets to international liabilities significantly improved to 85.2 percent in March 2026, up from 77.5 percent a year ago.
This reflects a moderation in external financial liabilities and an improvement in residents' overseas financial assets.
The share of debt liabilities in total external liabilities also increased gradually to 56.6 percent by end-March 2026.
External position gains strength
India's external financial position has notably strengthened, with net non-resident claims significantly reduced.
This positive shift enhances the nation's resilience to global economic fluctuations.
The improved asset-to-liability ratio signals a more stable financial outlook.