SDG 8: Decent Work & Economic Growth | SDG 17: Partnerships for the Goals
Institutions: Reserve Bank of India | Ministry of Finance
At the end of June 2025, India’s net external debt (net claims of non-residents) - the excess of what foreigners own in India over what Indians own abroad - stood at US$ 312.8 billion, lower by US$ 16.4 billion compared to the previous quarter. This pulled up the ratio of India’s assets to liabilities abroad to 79.2% (from 77.6% in March), showing the country’s external position has become more resilient.
On the assets side, reserve assets dominated with a 58.7% share, contributing over 62% of the quarterly increase. Liabilities rose mainly through direct investment, loans, and deposits, which together made up about 90% of the rise. The share of debt liabilities in total external liabilities edged down slightly to 54.5% from 54.8%.
Clarification: IIP here refers to International Investment Position, not the Index of Industrial Production.
The narrowing of net claims highlights improved external sustainability. Policymakers need to maintain this trajectory through prudent external borrowing, careful capital flow management, and strong reserve buffers, in line with India’s broader external sector policy.
What is International Investment Position (IIP)? → A stock measure of a country’s external financial assets and liabilities at a given time. In practice, it is tracked through the Net IIP (India’s net external debt, US$ 312.8 billion in June 2025) and the asset–liability ratio (79.2%), which together show whether the country is a net debtor or creditor and how resilient its external balance sheet is.
What are Net Claims of Non-Residents? → The difference between what foreigners own in India (liabilities) and what Indians own abroad (assets). A positive number means India owes more to the world than it owns, making it a net debtor; a smaller figure signals reduced external vulnerability.
What are Reserve Assets? → Highly liquid foreign assets held by the central bank, including foreign currency reserves, IMF assets, and gold. They act as a buffer for balance of payments stability and rupee defence during volatility.
Follow the full report here: RBI Press Release on India’s IIP, June 2025