India's Forex Reserves 4th Largest, Can Cover 11 Months of Imports: FM Sitharaman

 

India holds USD 658.8 billion in foreign exchange reserves, ranking fourth globally, enough to cover 11 months of imports, Finance Minister Nirmala Sitharaman shared in the Rajya Sabha on Tuesday. This places India behind China, Japan, and Switzerland. Despite foreign investor outflows since October, India saw a reversal in March 2025, with USD 3.84 billion flowing back in, indicating growing market strength, said Minister of State Chaudhary.

India’s Current Account Deficit (CAD) has significantly reduced, dropping from USD 67.1 billion in 2022–23 to USD 26.1 billion in 2023–24, and further to USD 21.4 billion in 2024–25, with the government focusing on promoting exports.

Despite global currency challenges, India’s economy remains resilient. The South Korean Won, Indonesian Rupiah, and Malaysian Ringgit all depreciated more than the rupee, which only fell 2.2% against the US dollar from October 2024 to March 2025. This is the least decline among major Asian currencies. During the same period, the Euro and British Pound also saw declines of 3.4% and 3.6% respectively.

Sitharaman explained that the rupee’s depreciation was influenced by factors like the rising US Dollar Index, capital flows, and crude prices. Since Q4 2024, global uncertainties led to depreciation of the rupee alongside other major Asian currencies, but India fared better. Foreign portfolio outflows of USD 19.9 billion also contributed to the rupee’s decline.