India Shifts Reserve Strategy: More Gold, Fewer U.S. Bonds

India is reducing its U.S. Treasury holdings and increasing gold reserves in 2025, signaling a broader shift toward diversification and financial security.

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Gold bullion

In 2025, India is making significant adjustments to the way it manages its international reserves. The Reserve Bank of India has begun gradually reducing investments in U.S. Treasury securities while simultaneously boosting the country’s gold reserves. This shift mirrors global trends, as more nations seek to diversify their reserves and reduce reliance on the U.S. dollar.

According to official data, by June 2025 India’s holdings of U.S. government debt fell to $227 billion, compared with $242 billion a year earlier. This represents a reduction of nearly $15 billion over 12 months. Despite the cutback, India still remains one of the largest foreign holders of U.S. Treasuries, ahead of countries like Saudi Arabia and Germany.

At the same time, India has been steadily building up its gold reserves. By June 2025, the country’s gold holdings had reached 879.98 tonnes, up from 840.76 tonnes the year before—an increase of 39.22 tonnes. Gold, long considered a safe-haven asset, provides India with greater resilience in the face of global financial instability.

Maintaining Strong Overall Reserves

Despite restructuring the composition of its reserves, India’s total reserve volume remains robust. As of August 22, 2025, foreign currency reserves stood at $690 billion, securing India a place among the world’s leaders in reserve holdings. The continued presence of U.S. Treasuries ensures a solid dollar base, while growing gold assets enhance long-term financial stability.

India’s strategy reflects a wider global movement among emerging economies. Growing geopolitical tensions, sanctions risks, and volatility in the U.S. dollar have pushed many countries to diversify their reserves. Gold, immune to political restrictions and valued across generations, is increasingly seen as the ultimate safeguard.

Economists describe India’s approach as a form of “financial insurance.” While the dollar remains the dominant reserve currency, greater reliance on gold minimizes exposure to American financial volatility. This dual strategy supports both economic stability and geopolitical autonomy, aligning with India’s growing influence in global trade and multilateral groups such as BRICS.