External Asset-Liability Position: An Emerging Facet of India's Investment Abroad

It is an established fact that the ability of internationalization of all economy is largely dependent on its investment links with the rest of the world - both inward and outward. While inward investment plays a critical role in bridging the gap between the amount of investment targeted by the country and the domestic availability of funds, outward investment signifies the strength of the country to take investment abroad for building up economic gain along with claiming a stronger international positioning. Though India as a fast developing country has undoubtedly marked her presence in the international economic arena on both the fronts yet much of the researcher's attention is still found concentrated on the study of the country's inward investment. The present paper, as a break away from the normal approach, makes an attempt to study the asset­ liability status of India's investment abroad. With the help of the data collected from the online source of Reserve Bank of India the paper tries to examine the trend of assets, liabilities and the net of the two due to India's international investment during 2003-10. Based on the policy backdrop relating to outward investment of India, the paper concludes by suggesting meaningful modifications and amendments of the critical government policies for building up more assets than liabilities from international investment with a view to at least minimizing the negative gap.