India's net external liabilities rise to $220.3bn as portfolio equity shrinks

Serguey Asael Shinder01 October 2026, 07:222 min read

India's net international investment position worsened in the April to June quarter, the first of fiscal 2026-27, according to data released by the Reserve Bank of India on 30 September. Net claims of non-residents on India rose by $16.5 billion to $220.3 billion at the end of June.

The RBI attributes the change to two movements in the same direction: external liabilities rose by $11.6 billion, and India's foreign assets fell by $4.9 billion. As a result, the ratio of international assets to liabilities slipped to 84.6% from 85.7% at the end of March. A year earlier, at the end of June 2025, the ratio stood at 79.0%, so the quarter interrupts an improving trend rather than reversing it.

The composition of the liability side changed more than the total. Direct investment liabilities rose by $15.7 billion and other investment by $4.2 billion, while portfolio equity liabilities fell by $14 billion. In the RBI's table, foreign holdings of Indian portfolio equity stood at $95.3 billion at the end of June, down from $109.3 billion in March and $147.4 billion a year earlier.

On the asset side, reserve assets accounted for 55.1% of India's international financial assets, and overseas direct investment for more than a quarter. The share of debt in total external liabilities has been rising gradually and reached 56.9% at the end of June.

The release follows the RBI's data on external debt for the same quarter, published the same day.

Why it matters

A falling stock of foreign portfolio equity, from $147 billion to $95 billion in a year, can reflect both selling and lower valuations, and it is the most mobile part of India's foreign funding. Longer-term direct investment is filling the gap, but a rising debt share means more of the remaining liabilities have to be serviced in good times and bad.