India’s foreign exchange reserves stand at USD 658.8 billion, enough to cover 11 months of imports, Finance Minister Nirmala Sitharaman informed the Rajya Sabha.
Replying to supplementaries during the question hour, she assured members of their concerns on the foreign exchange reserves and the current account deficit.
“I want to assure you that total foreign exchange reserves as of March 25, 2025, is USD 658.8 billion. We are the fourth largest in terms of foreign exchange reserves that any country holds. Which means the amount that we hold in foreign exchange reserve is good enough to take care of 11 months of our imports.
“Even though there has been a little fall in the foreign exchange reserve, today the position is that we are the fourth largest in terms of foreign exchange reserves that we hold,” the finance minister said.
India is the fourth largest nation in terms of foreign exchange reserves after China, Japan and Switzerland.
Earlier, responding to concerns of members on the depreciating value of the Indian rupee, Minister of State for Finance Pankaj Chaudhary said the local currency has strengthened in the last few months while several other countries, including South Korea and the United Kingdom, had depreciated more.
On foreign investors pulling out money from the Indian capital markets, the minister said, “Foreign portfolio investors are by nature “fly-by-night” and FPIs have booked their profits in recent months in the Indian markets and reposes confidence in Indian markets”.
In the last 10 years, he said, the confidence of foreign investors in Indian markets and economy has been reposed.
“Even though foreign investors have taken out money from Indian markets since October last, in March this year, USD 3.84 billion has come into the country. This shows that the trend of foreign investors investing in has started. Our financial market has become robust and this is a continuous process,” Chaudhary noted.
On the Current Account Deficit, he said in the last two years, it is constantly coming down.
“In 2022-23 due to Covid, the Current Account deficit was USD 67.1 billion. It has come down to USD 26.1 billion (in 2023-24) and has come down to USD 21.4 billion (in 2024-25). The government is continuously making efforts to promote exports,” he said.
Noting that the Indian economy is in a strong position, Chaudhary said, “While the South Korean Won depreciated 10.5 per cent against the US Dollar, Indonesian Rupiah and Malaysian Ringgit depreciated by 8.7 per cent and 6.9 per cent, respectively, during this period”.
“Further, all G10 currencies (except Swedish Krona) also depreciated during October 1, 2024, to March 26, 2025, with Euro and British Pound depreciating by 3.4 per cent and 3.6 per cent, respectively.”
This shows that the fundamentals of the Indian economy are strong under Prime Minister Narendra Modi’s leadership, the minister of state said.
In her written reply to a starred question on the depreciation of the rupee, Sitharaman said various domestic and global factors influence the exchange rate of the rupee (INR) against the US Dollar (USD), such as the movement of the Dollar Index, trend in capital flows, level of interest rates, movement in crude prices, current account deficit etc.
Since the commencement of the last quarter of the calendar year 2024, the rupee, along with other major Asian currencies, depreciated against the US dollar amid global uncertainties, she said.
“US Dollar Index rose 3.7 per cent during October 1, 2024, to March 26, 2025, with all Asian currencies depreciating against the USD. The rupee has depreciated 2.2 per cent against the US dollar during this period, least among major Asian currencies,” she added.
“Further, foreign portfolio investment (FPI) outflows of around USD 19.9 billion from Indian markets during October 1, 2024, to March 26, 2025, was also one of the contributory factors for the depreciation of INR against the USD.
