India’s central bank is leaning more on gold than US Treasury bills (USTs) to strengthen its foreign exchange reserves, data from the US Department of the Treasury and the Reserve Bank of India (RBI) showed.
The shift mirrors a broader global move to diversify reserve assets away from the dollar.
India’s investments in US T-bills dropped to $227 billion in June 2025, from $242 billion a year earlier, while its gold holdings rose during the same period. Despite the reduction, New Delhi remains among the top 20 investors in US T-bills, ahead of Saudi Arabia and Germany.
The RBI purchased about 39.22 metric tonnes of gold in the past year, taking total gold reserves to 879.98 metric tonnes as of June 27, 2025, compared with 840.76 metric tonnes a year earlier.
Madan Sabnavis, chief economist at Bank of Baroda, said: “Indian reserves have witnessed a steady buildup of gold, alongside diversification in forex currency assets. This reflects a wider global trend of reducing reliance on the dollar amid trade conflicts and geopolitical tensions.”
Echoing this, Gaura Sengupta, economist at IDFC First Bank, noted: “India’s UST holdings fell by $14.5 billion over one year despite lower yields, showing a deliberate diversification away from USTs. The rise in gold reflects efforts to mitigate revaluation risks tied to US-specific factors such as worsening fiscal metrics and elevated yields.”
India’s UST stock was at its lowest in December, just before Donald Trump assumed office. Nearly all of the $227 billion outstanding is part of the country’s foreign exchange reserves, which stood at $690 billion as of August 22, 2025.
Globally, the reshuffle is evident. China, the third-largest holder after Japan and the UK, cut its UST holdings to $756 billion in June 2025, down from $780 billion a year earlier. In contrast, Israel sharply raised its investments in the asset class during the same period.
