New Delhi: India has reduced its holdings of US Treasury securities to nearly a six-year low as the Reserve Bank of India (RBI) continues to diversify the country’s foreign exchange reserves. According to data from the US Federal Reserve, India’s investments in US government debt fell to $181 billion in April 2026, while the RBI further strengthened its gold reserves, reflecting a broader strategy to reduce concentration in a single asset class.
The shift comes amid growing geopolitical uncertainties and follows a global trend of central banks increasing their gold holdings as part of reserve diversification strategies.
US Treasury holdings fall sharply
India’s exposure to US Treasury securities declined from $232 billion in April 2025 to $181 billion in April 2026, marking a significant reduction over the past year.
According to available data, this is the lowest level of India’s holdings since May 2020, when investments in US Treasuries stood at approximately $169 billion.
The decline indicates the RBI’s continued effort to rebalance its foreign exchange reserves by reducing reliance on US sovereign debt while increasing allocations to other reserve assets.
Gold reserves continue to rise
As investments in US Treasury securities declined, India’s gold holdings registered a modest increase.
RBI data show that the country’s gold reserves rose to 881 metric tonnes in April 2026, up from 879 metric tonnes a year earlier.
The increase becomes more significant when viewed over a longer period. Six years ago, India’s gold reserves stood at 658 metric tonnes, highlighting the RBI’s steady accumulation of the precious metal.
The value of India’s gold reserves has now reached approximately $102.5 billion, according to RBI data.
RBI pursuing diversification strategy
Economists say the reduction in US Treasury holdings reflects the RBI’s ongoing strategy of diversifying India’s foreign exchange reserves rather than signalling a withdrawal from dollar-denominated assets altogether.
Madan Sabnavis, Chief Economist at Bank of Baroda, said the decline was linked to a reduction in India’s foreign currency assets over the past year.
“We have seen foreign currency assets decrease over the past one year, so natural holdings of US Treasury bills, which are a part of foreign currency assets, have decreased,” he was quoted as saying.
Gold offers strategic security
Sabnavis also highlighted gold’s strategic importance in reserve management, noting that unlike sovereign debt, it is not linked to any particular country.
He said gold is generally not sold to manage day-to-day exchange rate volatility but serves as an important reserve asset during periods of severe financial stress.
According to him, in extreme circumstances such as financial sanctions or restricted access to foreign currency assets, gold can be monetised or pledged to raise liquidity.
Russia sanctions influenced reserve strategies
The importance of gold as a reserve asset gained greater prominence after Western countries froze a significant portion of Russia’s foreign exchange reserves following the conflict in Ukraine in 2022.
That episode reinforced the view among many central banks that gold carries no counterparty risk and remains accessible even during periods of geopolitical uncertainty.
The experience has encouraged several countries to diversify their reserve portfolios by increasing gold holdings alongside traditional reserve assets.
Global central banks also buying gold
The RBI is not alone in expanding its gold reserves.
According to the World Gold Council, central banks in countries including Poland, China, the Czech Republic and Türkiye remained net buyers of gold during April.
At the same time, several advanced economies—including Japan, the United Kingdom, Belgium, France and Canada—continued to increase their holdings of US Treasury securities through net purchases.
The contrasting approaches reflect differing reserve management strategies based on each country’s economic priorities, currency composition and geopolitical considerations.
While India continues to hold substantial investments in US government debt, the latest data indicate that the RBI is steadily broadening the composition of its reserve assets to enhance resilience and reduce concentration risks in an increasingly uncertain global economic environment.