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India is increasingly leaning on gold to strengthen its foreign exchange reserves while trimming its exposure to US Treasury bills (USTs), according to a report by The Economic Times. Fresh data from the Reserve Bank of India (RBI) and the US Treasury Department show a shift in preference that reflects a global move away from heavy reliance on the US dollar.
Decline in US Treasury investments
The news report mentions India’s holdings of US T-bills dropped to $227 billion in June 2025, compared to $242 billion a year earlier. Despite the reduction, the country still figures among the top 20 investors in American debt, ahead of economies like Saudi Arabia and Germany.
Economists note that this decline in dollar-linked assets is part of a wider trend of countries spreading risk by diversifying their reserve portfolios. The Economic Times quoted Madan Sabnavis, chief economist at Bank of Baroda, who said that India’s reserves have seen a rise in gold holdings along with a reallocation in foreign currency assets.
Gold purchases on the rise
During the same period, the RBI added 39.22 metric tonnes of gold to its reserves. India’s gold stockpile stood at 879.98 metric tonnes on June 27, 2025, up from 840.76 metric tonnes a year earlier, the news report said.
India is not alone in adjusting its reserve mix. China, the third-largest holder of US Treasuries after Japan and the UK, trimmed its holdings to $756 billion in June 2025, from $780 billion in June 2024. Meanwhile, Israel took the opposite path, boosting its exposure to US debt.
Forex reserves are still strong
Despite lowering its US bond exposure, India’s overall foreign exchange reserves remain at $690 billion as of August 22, 2025. Nearly all of the country’s Treasury holdings are part of this stockpile, ensuring that New Delhi still maintains a sizable dollar cushion even as it strengthens its gold position, the news report said.
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