India’s external outlook is deteriorating as dollar liquidity tightens, the rupee weakens, and trade gaps widen. Stable foreign investment is being replaced by more volatile flows, while the “quality” of capital improves less reliably than before. The result is a renewed balance of payments focus, with risks rising for currency stability and macro management.
India’s net foreign liabilities declined by $10.9 billion in the last quarter of 2025, according to RBI data. The shift came because Indian residents increased overseas investments more than foreigners added assets in India. As a result, India’s international assets-to-liabilities ratio improved, pointing to a stronger external financial position.
Your news, in seconds
Get the Beige app — every story in 60 words, updated hourly. Free on iOS & Android.
Swipe through stories, personalise your feed, and save articles for later — all on the app.
