INTERNATIONAL INVESTMENT POSITION(IIP):

International Investment Position (IIP) depicts the value and the composition of financial
assets of residents that are claims on non-residents and liabilities of residents to non-
residents. A net international investment position (NIIP) measures the gap between a
nation’s stock of foreign assets and a foreigner's stock of that nation's assets. A nation
with a positive NIIP is a creditor nation, while a nation with a negative NIIP is a debtor
nation.

Net IIP 2017-2021

1400
1200
1000
UNIT : In US$ Billion

800
600 Net IIP
400
Total Assests
200
0 Total Liabilities
-200 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
-400
-600

As we can see in this linear graph, the Net International Investment Position (IIP) of India
has always been negative as India has more liabilities than the assets. There has not
been much increase or decrease in the past five years. When comparing 2017 and 2021,
it was approximately 10% change. But it showed some dip in the years 2018 and 2019,
as it was 6% and 11% respectively when compared to the previous year. It recovered the
next year and in the year 2021, slightly.

TOTAL EXTERNAL DEBT:

Total external debt of the country tells us about the liabilities that are owed to non
residents by residents of the country. The debtors can be governments, corporations or
citizens. They can be denominated in domestic or foreign currency.
 Tot External Debt vs its respective
600
GDP percentage
500

400

300

200

100

0
1 2 3 4 5
-100
Total external debt GDP percentage

As the linear graph shows us that the increase in the external debt of the country can
bring a downfall in the GDP percentage of the country. There has not been much increase
or decrease in the past five years. Comparing the Total external debt and the GDP
percentage of the country we can observe there is a downfall in the year 2020 while the
total external debt of the country has been increased by (15.4 billion dollars.).

COORELATION:

Correlation helps us to find whether two factors are interlinked or not. Here we take NET
IIP and GDP rate of the country from International investment position and the total
external debt of the country.

Chart Title
50
0
-50 1 2 3 4 5

-100
-150
-200
-250
-300
-350
-400
-450
NET IIP (*10) GDP rate
As from the simple linear graph we can easily find out that there is no correlation between
NET IIP and GDP rate of the country. Increase or decrease in the NET IIP doesn’t have
any impact on the GDP rate of the country. International investment position is a important
barometer of a nation’s financial condition and creditworthiness. We have a negative NIIP
which indicates that we are debtor nation. GDP Rate indicates the growth size of the
economy. From the graph, we can get the clear interpretation that they are not correlated.

Whatever the GDP rate be , India continues to be debtor nation because of various other
investments(direct investments, other investments) which are necessary for the country’s
growth.