India’s foreign exchange reserves increased by $938 million to $682.321 billion in the week ending May 28, as per data from the Reserve Bank of India. This rise follows a previous week’s decline when the reserves had fallen to $681.384 billion by $7.511 billion.
Despite recent fluctuations, India’s reserves remain one of the highest globally, although they are below the peak of $728.494 billion recorded in February. The reserves faced pressure due to conflicts in the Middle East, leading the RBI to intervene by selling dollars to support the rupee.
Prime Minister Narendra Modi urged citizens to conserve foreign exchange by reducing foreign travel, limiting fuel consumption, and avoiding gold purchases for a year. Foreign currency assets (FCAs), the largest component of India’s reserves, rose by $3.116 billion to $546.148 billion during the week.
The value of India’s gold reserves, however, decreased by $2.186 billion to $112.6 billion in the same period. The country’s Special Drawing Rights (SDRs) with the International Monetary Fund remained steady at $18.747 billion.
RBI Deputy Governor Poonam Gupta expressed optimism about foreign investment inflows, predicting gross FDI inflows to surpass $100 billion in the current financial year 2026-27. Gupta highlighted that India saw $95 billion in gross FDI inflows in FY26, supported by robust private capital formation and an increasing investment-to-GDP ratio.
Gupta suggested that foreign investment could potentially reach $110 billion to $120 billion in FY27, attributing this growth to a long-term structural trend. She emphasized the positive private capital formation and rising investment-to-GDP ratio, indicating a promising outlook for FDI inflows in India despite global economic uncertainties.
