India's $695 billion reserves can cover 11 months of exports: RBI Governor

RBI Governor Sanjay Malhotra said India's forex reserves at $695 billion can cover 11 months of imports, giving the economy a strong buffer against global shocks ahead of Aug 27 tariff deadline

Reserve Bank of India (RBI) Governor Sanjay Malhotra on Monday said the country’s foreign exchange reserves are strong enough to cover 11 months of merchandise exports, giving the economy a buffer against global shocks while speaking at the annual banking conference FIBAC 2025 in Mumbai.

 

“We have very robust foreign exchange reserves, $695 billion as per the latest figures that are available with us, sufficient to cover 11 months of merchandise exports," he said. It must be noted that the RBI typically benchmarks forex reserves against imports, not exports.  The governor further explained, "This has been all possible because of very strong and prudent fiscal and monetary policies followed by the government and the various regulators over the last few years. Structural reforms, massive upscaling of both physical and digital infrastructure, improved governance and enhanced productivity and competitiveness.” 

RBI MPC to continue focus on inflation, growth

Malhotra stressed that the central bank’s Monetary Policy Committee (MPC) will continue to focus on keeping inflation under control while supporting growth.

 

“The MPC will continue to focus on price stability while keeping in view the objective of growth. Supply-side measures and monetary policy have helped contain CPI inflation. Stringent regulations may impede economic growth, and rules have been relaxed when the context demanded,” he said.

 

Malhotra described the global environment as uncertain, citing trade disruptions and geopolitical tensions. 

 

“We are now at a critical juncture... As we navigate the choppy global economic environment characterised by heightened trade uncertainty and persisting geopolitical tensions, we need to push the frontiers of growth. We all must step up our efforts to address emerging challenges and, at the same time seize the opportunities that are coming our way.” 

US tariffs add pressure

Malhotra’s comments come as US tariffs on Indian exports are set to take effect on Wednesday, August 27. The Trump administration has announced an additional 25 per cent duty, doubling the overall levy to 50 per cent, linking the move to India’s continued imports of Russian crude oil.

 

In FY24, India shipped goods worth $86.5 billion to the US, about 20 per cent of its total merchandise exports. The government has called the tariffs unfair and said it will act in the country’s best interest.