According to the Reserve Bank of India’s balance of payments data released recently, the net direct investment into India has increased significantly by $7.2 billion during the April to June 2011 period, against $2.9 billion in the corresponding quarter last year.
Reports said that the net loans offered by banks were at $11.5 billion compared with $2.9 billion in Q1 of 2010-11. This was mainly due to the draw down of their foreign currency assets that were held abroad and also due to the rise in overseas borrowings.
RBI reports also said that the net loans offered by the non-Government and non-banking sectors (net ECBs) were at $2.9 billion and the net inflows under short-term trade credit moderated to $3.1 billion in Q1 of 2011-12, as compared to $4.3 billion in Q1 of 2010-11.
Reports also said that the foreign exchange reserves have increased by $10.9 billion during the quarter, due to the depreciation of the US dollar against major international currencies during the quarter.
RBI reports added saying that the rise in the trade deficit, in spite of a sharper growth in exports than imports and an increase in net export of services, has caused the extension of the current-account deficit (CAD) as compared with Q1 of the previous year.