India has large foreign-exchange reserves; holdings of cash, bank deposits, bonds, and other financial assets denominated in currencies other than India's national currency, the Indian rupee. The reserves are managed by the Reserve Bank of India for the Indian government and the main component is foreign currency assets.

Foreign-exchange reserves act as the first line of defense for India in case of economic slowdown, but acquisition of reserves has its own costs.[1] Foreign exchange reserves facilitate external trade and payment and promote orderly development and maintenance of foreign exchange market in India.[2]

India's total foreign exchange (Forex) reserves stand at around US$608.081 Billion on 11 June 2021, the highest ever, with the Foreign Exchange Assets (FCA) component at around US$563.457 Billion, Gold Reserves at around US$38.101 Billion, SDRs (Special Drawing Rights with the IMF) of around US$1.512 Billion and around US$5.011 Billion Reserve Position in the IMF, as per Reserve Bank of India's (RBI) weekly statistical supplement published on 04 June 2021.[3] The Economic survey of India 2014-15 said India could target foreign exchange reserves of US$750 Billion-US$1 Trillion.[4]

India's foreign exchange reserves are mainly composed of US dollar in the forms of US government bonds and institutional bonds.[5][6] with nearly 6.2% of forex reserves in gold. The FCAs also include investments in US Treasury bonds, bonds of other selected governments and deposits with foreign central and commercial banks. As of January 2021, India holds fourth largest foreign-exchange reserves in the world following SWITZERLAND.[7][8]


Reserve Bank of India Act and the Foreign Exchange Management Act, 1999 set the legal provisions for governing the foreign exchange reserves. Reserve Bank of India accumulates foreign currency reserves by purchasing from authorized dealers in open market operations. Foreign exchange reserves of India act as a cushion against rupee volatility once global interest rates start rising.[9]

The Foreign exchange reserves of India consists of below four categories;[10][11]

  1. Foreign Currency Assets - Total FCA till March 2021 was $536.69 billion out of which $359.87 billion is invested in overseas securities, $153.39 billion is deposited with other central banks and $23.42 (4.36 percent of total FCA) billion is deposited with overseas commercial banks.[12]
  2. Gold - As of March 2021 RBI held 695.31 metric tonnes of gold. 403.01 metric tonnes of which is in custody of Bank of England and Bank for International Settlements. 292.30 tonnes of gold is held domestically. [13]
  3. Special Drawing Rights (SDRs)
  4. Reserve Tranche Position


See also

India related
Global lists and other nations


  1. ^ "Costs Involved in Increasing Forex Reserves: RBI".
  2. ^ "RBI".
  3. ^
  4. ^ "RBI Monetary Policy $1 trillion forex reserves: A pipe dream".
  5. ^ "Major foreign holders of treasury securities of USA". Retrieved 22 January 2021.
  6. ^ Y V Reddy: India’s foreign exchange reserves – policy, status and issues – May 10, 2002
  7. ^ a b "Surging forex reserves to help improve economic outlook".
  8. ^ "Look How Rich India's Become Under New Prime Minister Modi".
  9. ^ "India's forex reserves will cushion Rupee volatility: Rajan".
  10. ^ "Report on Management of Foreign Exchange Reserves". 8 December 2020. Retrieved 22 January 2021.
  11. ^ "Foreign exchange reserves of india".
  12. ^
  13. ^
  14. ^ a b Forex reserve history
  15. ^ "India flexes its foreign reserve muscles".
  16. ^