India’s net international investment position improved in the January-March 2026 quarter. Net claims of non-residents on India fell by US$52.4 billion to US$209.9 billion at the end of March. The improvement was driven by a US$40.1 billion decline in foreign-owned assets in India and a US$12.3 billion increase in overseas financial assets held by Indian residents.
Foreign liabilities declined mainly because of lower portfolio investment and foreign direct investment (FDI) in India. Although inward FDI increased in rupee terms, the rupee’s depreciation against the US dollar reduced its value when measured in dollar terms. Exchange rate movements also affected the overall value of India’s external liabilities.
Indian residents increased their overseas investments during the quarter, with over 60% of the rise coming from overseas direct investment, followed by higher reserve assets. At the end of March 2026, reserve assets made up 57.1% of India’s international financial assets, while overseas direct investment accounted for about one-fourth.
India’s financial position strengthened further as the ratio of international assets to international liabilities improved to 85.2% in March 2026, up from 82.0% in the previous quarter. Meanwhile, debt liabilities continued to rise as a share of total external liabilities, reaching 56.6% at the end of March.
For the full FY2025-26, net claims of non-residents on India declined by US$119.2 billion. This reflected a US$42.8 billion fall in external financial liabilities, helped by the rupee’s depreciation, and a US$76.4 billion increase in overseas financial assets held by Indian residents. The growth in overseas assets was mainly driven by direct investment abroad and higher reserve assets, while lower portfolio investment and FDI from non-residents reduced India’s foreign liabilities.
As a share of GDP, India’s overseas financial assets increased while external liabilities declined during FY2025-26. As a result, the ratio of international assets to liabilities improved to 85.2% from 77.5% a year earlier, and the net claims of non-residents on India improved to (-)5.9% of GDP in March 2026, compared with (-)9.0% a year earlier.
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