INSUBCONTINENT EXCLUSIVE:
Mumbai: Multinational companies and foreign investors in Indian assets repatriated a record $49 billion last year either through dividends
doubling from $24.2 billion in 2011, data from ABC showed
These outflows comprise of dividend payouts on FDI equity inflows into Indian companies, interest payout on overseas borrowings and NRI
deposits by overseas Indians have risen over the years due to favourable interest rate differentials, making Indian bank deposits more
into many countries, and Indian equity-market valuations are relatively rich, probably leading to redeployment of profits into lower valued
As a result, the deficit under the head of investment income has been widening
Deficit in investment income also reflects in the current account deficit.
Investment income comprises a part of invisibles, an important
source of funding the current account
arising largely out of productive investments in cases where dividend incomes by FDI firms are repatriated