Reserve Bank of India (RBI) Governor Sanjay Malhotra on Monday (25 August 2025) said the country’s foreign exchange reserves stand at $695 billion, strong enough to cover 11 months of merchandise exports. Speaking at the FIBAC 2025 annual banking conference in Mumbai, he highlighted the resilience of India’s external sector against global economic shocks.
“We have very robust foreign exchange reserves, $695 billion as per the latest figures, sufficient to cover 11 months of merchandise exports,” Malhotra said.
Traditionally, the RBI benchmarks forex reserves against imports, but the Governor emphasised that India’s reserves are now strong enough to provide a cushion for exports as well.
Strong Policies Driving Reserves Growth
Malhotra credited India’s reserve strength to:
- Prudent fiscal and monetary policies by the government and regulators.
- Structural reforms supporting productivity and competitiveness.
- Massive expansion in physical and digital infrastructure.
- Improved governance and institutional efficiency.
He said these factors collectively boosted India’s ability to withstand global volatility.
MPC’s Priorities: Inflation and Growth
On monetary policy, Malhotra reiterated that the RBI’s Monetary Policy Committee (MPC) will continue to prioritise:
- Price stability and controlling inflation.
- Supporting economic growth.
He added that a mix of supply-side measures and flexible regulations helped contain CPI inflation, while rules have been relaxed when necessary to avoid stifling growth.
Global Headwinds and Emerging Risks
The RBI Governor cautioned that the global economic environment remains uncertain, shaped by:
- Trade disruptions,
- Heightened geopolitical tensions, and
- Increasing protectionist policies.
“We are at a critical juncture… navigating a choppy global environment requires us to push the frontiers of growth, address emerging challenges, and seize new opportunities,” he said.
Impact of US Tariffs on Indian Exports
His remarks came just days before US tariffs on Indian exports take effect on August 27, 2025. The Trump administration announced an additional 25% duty, raising the total levy to 50%, citing India’s continued imports of Russian crude oil. The move adds fresh pressure on India’s exporters at a time of global trade uncertainty.
Summary
India’s $695 billion forex reserves, equivalent to 11 months of exports, provide a strong buffer against external shocks, according to RBI Governor Sanjay Malhotra. He credited robust policies, infrastructure growth, and reforms for strengthening reserves. The RBI will continue balancing inflation control and growth support through its monetary policy. However, with geopolitical tensions, trade disruptions, and upcoming US tariffs, India faces both challenges and opportunities in safeguarding economic stability.
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