India’s Forex Reserves Remain Robust, 4th Largest Globally: Economic Survey

India’s forex reserves totalled $640.3 billion by December 2024, sufficient to cover 90% of external debt and nearly 11 months of imports. Despite a dip, India remains the 4th largest reserves holder globally.

India’s Foreign Exchange Reserves Remain Strong

As per the Economic Survey, India’s foreign exchange reserves amounted to $640.3 billion by December 2024, providing a strong buffer against external debt and vulnerabilities. These reserves cover approximately 90% of India’s external debt, which stood at $711.8 billion in September 2024, and nearly 11 months of imports.

Global Rank and Composition of Reserves

India continues to hold its position as the fourth-largest holder of forex reserves globally, following China, Japan, and Switzerland. Despite a nearly $70 billion dip from their peak, India’s reserves remain robust. The reserves are largely bolstered by positive capital inflows, contributing to an increase of $27.1 billion in 2024.

Shifting Global Reserve Landscape

The Economic Survey also notes ongoing changes in the global foreign exchange reserve system, with emerging market central banks increasing gold bullion holdings. These shifts are part of a broader trend toward reduced reliance on the U.S. dollar and the rise of non-traditional currencies, as highlighted by an IMF study.

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