What’s happening
The Reserve Bank of India (RBI) has begun shifting its foreign exchange reserve composition reducing its exposure to U.S. Treasury bills and significantly increasing its gold holdings. This move aligns India with a global trend of diversifying away from the U.S. dollar.
Key Numbers
U.S. Treasury Holdings: Dropped to around $227 billion in June 2025 from $242 billion a year earlier marking a $15 billion decline. India still ranks among the top 20 holders globally, ahead of countries like Saudi Arabia and Germany.
Gold Reserves: Rose from 840.76 metric tonnes (June 2024) to 879.98 metric tonnes (June 2025). That’s nearly 39.22 tonnes added.
Current Reserve Value: Gold now makes up an estimated 12.1% of India’s forex reserves as of mid-July 2025, up from 8.9% a year earlier.
Why it matters
- Diversification & Stability
Gold is traditionally seen as a safer asset during volatile periods. Piling up gold helps India hedge against foreign currency risk and U.S. specific fiscal instability. - Strategic Autonomy
The reduced reliance on U.S. Treasuries gives the RBI more resilience against external shocks and geopolitical risks. - Global Trend
This isn’t unique to India. Many central banks are turning to gold to balance their portfolios and preserve value.
Expert View
Madan Sabnavis, Chief Economist at Bank of Baroda, explained that India’s increasing gold reserves are part of a broader move “accompanied by diversification in forex currency assets.”
Quick Recap
| Asset Type | Change Between June 2024–June 2025 |
|---|---|
| U.S. Treasury Bills | ↓ From $242B to $227B (↓ $15B) |
| Gold Reserves | ↑ From 840.76 to 879.98 tonnes (↑ 39.22 t) |
| Gold’s Share in Reserves | ↑ From ~8.9% to ~12.1% |
