Data from the US Department of Treasury show that India’s holdings of US Treasury securities declined from $225.7 billion in January to $182.9 billion as of December 31 — a fall of $42.8 billion, or 18.96 per cent
India reduced its exposure to US government debt by nearly 19 per cent in calendar year 2025, signalling a calibrated shift in foreign exchange reserve management amid global trade tensions and financial uncertainty.
Data from the US Department of Treasury show that India’s holdings of US Treasury securities declined from $225.7 billion in January to $182.9 billion as of December 31 — a fall of $42.8 billion, or 18.96 per cent.
India is currently the 15th largest holder of US Treasuries. Its exposure had peaked at $247.2 billion in September 2024 before declining gradually over subsequent months. In December 2025 alone, holdings fell by $3.6 billion.
What the reduction signals
Investment in US Treasuries effectively means lending to the US government, which issues the securities to finance spending across defence, healthcare and infrastructure. These instruments are considered among the safest global assets due to their backing by the US government and deep market liquidity.
The reduction comes against the backdrop of prolonged trade tensions with the US. President Donald Trump had imposed steep tariffs on Indian imports last year, triggering concerns about potential financial restrictions. After Russia’s invasion of Ukraine, the US and its allies froze a significant portion of Moscow’s foreign reserves.
While India and the US recently announced a trade agreement, tariff uncertainties persist after US court interventions and fresh duty announcements.
How India compares globally
India’s drawdown contrasts with trends among some other major holders. China’s holdings fell from $760.8 billion to $683.5 billion during 2025. However, Japan — the world’s largest holder — increased its exposure from $1,079.3 billion to $1,185.5 billion. The UK also raised its holdings from $740.2 billion to $866 billion, according to Treasury International Capital (TIC) data.
RBI’s diversification strategy
The Reserve Bank of India, which manages the country’s forex reserves, has maintained that its investments are spread across highly rated sovereign bonds, supranational securities, deposits with central banks, and gold to ensure safety and liquidity.
India’s foreign exchange reserves rose by $90 billion year-on-year to $725.72 billion as of February 13, 2026, aided by a sharp jump in gold valuations. Gold holdings now stand at $128.46 billion — up $54 billion over the year.
As of September 2025, out of total foreign currency assets of $579.18 billion, $489.54 billion was invested in securities, $46.11 billion was placed with other central banks and the Bank for International Settlements, and $43.53 billion was held as deposits with overseas commercial banks.
End of Article
