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India’s Net International Liability Comes Down

Kumari Sonali

India’s Net International Liability Comes Down:

India’s net financial obligations to the rest of the world saw a notable decline of USD 10.9 billion during the third quarter of the 2025-26 fiscal year.

  • The net claims of non-residents on India decreased to USD 260.5 billion, primarily because the growth in Indian residents’ overseas financial assets (USD 12.8 billion) significantly outpaced the rise in foreign-owned assets in India (USD 1.9 billion).
  • Net claim is the difference between total foreign-owned assets in India and Indian-owned assets abroad.
  • The ratio of India’s international assets to liabilities improved to 82.1%, up from 74.6% in 2024-25, indicating a strengthening external balance sheet.
  • The Asset-to-Liability Ratio is a financial metric used to assess the solvency and financial health of an entity (a company, a country, or even an individual). It measures the relationship between what is owned (assets) and what is owed (liabilities).
  • The surge in overseas assets was fueled by a USD 7.6 billion rise in outward direct investments and a USD 9.4 billion increase in currency and deposits.
  • While Reserve assets (making up 57.4% of total overseas assets) dipped by USD 12.4 billion during the quarter to reach USD 687.7 billion, they maintained an annual growth of 8.2%.
  • Inward direct and portfolio investments declined, but were offset by a USD 11.4 billion rise in trade credit; consequently, the share of debt liabilities in total external liabilities rose to 55.3%.