India’s Forex Reserves Cross $702 Billion on Gold Reserve Surge

India’s foreign exchange reserves climbed by $4.5 billion to reach $702.3 billion for the week ended October 17, according to data released by the Reserve Bank of India (RBI). The increase was primarily driven by a sharp rise in the value of the country’s gold reserves, which surged by $6.2 billion to exceed $108.5 billion for the first time.
The jump in gold reserves came amid a strong rally in global gold prices and continued purchases by the RBI. Meanwhile, foreign currency assets, which make up the largest component of the reserves, declined by $1.7 billion to $570.4 billion, reflecting fluctuations in major global currencies such as the euro, pound, and yen. India’s reserve position with the International Monetary Fund (IMF) also fell slightly by $30 million to $4.62 billion.
Over the past decade, the share of gold in India’s total reserves has nearly doubled, rising from below 7 percent to almost 15 percent. This marks the highest proportion of gold in the country’s reserves since 1996–97, highlighting the RBI’s strategy of steady accumulation alongside the surge in global bullion prices.
Analysts attribute the sharp increase in gold prices, up nearly 65 percent in 2025, to heightened geopolitical tensions in the Middle East and trade uncertainties linked to U.S. tariff hikes. In response to these global risks, central banks worldwide have been diversifying their reserves and increasing gold holdings as a safe-haven asset.
Since 2024, the RBI has reportedly added around 75 tonnes of gold, bringing its total holdings to 880 tonnes, which now account for about 14 percent of India’s total forex reserves, according to a Morgan Stanley report. This strategic buildup underscores India’s efforts to strengthen its financial resilience amid a volatile global environment.