Question

    Consider the following statements regarding the net claims of non-residents on India-

    I.According to the data released by RBI, net claims of non-residents in India increased USD 12.1 billion to USD 379.7 billion in the June quarter.

    II.Increase in reserve assets, at USD 16.6 billion, was the largest contributor to the rise in Indian residents' foreign assets during the April-June period, followed by direct investment, loans and trade credit.

    III.Inward portfolio investment and foreign direct investment together accounted for three-fourths  of the rise in foreign liabilities of Indian residents.

    Which of the following statements is/are correct?

    A Only I Correct Answer Incorrect Answer
    B Only I & II Correct Answer Incorrect Answer
    C Only II Correct Answer Incorrect Answer
    D Only II & III Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

      According to the data released by RBI, net claims of non-residents on India increased USD 12.1 billion to USD 379.7 billion in the June quarter on account of higher rise in foreign-owned financial assets.Increase in reserve assets, at USD 16.6 billion, was the largest contributor to the rise in Indian residents' foreign assets during the April-June period, followed by direct investment, loans and trade credit, as per the data on India's international investment position' for June-end.The rise in net claims of non-residents during the quarter was on account of higher rise in foreign-owned financial assets in India (USD 36.2 billion) when compared with Indian residents' overseas financial assets (USD 24.1 billion).   Inward portfolio investment (USD 15 billion) and foreign direct investment (USD 8.9 billion) together accounted for two-thirds of the rise in foreign liabilities of Indian residents.As per the data, reserve assets accounted for 64.2 per cent of India's international financial assets at the end of the June quarter.

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