India's Foreign Exchange Reserves Drop $7.5 Billion to $681.38 Billion
India's forex reserves contracted by $7.5 billion, settling at $681.38 billion. The decline follows significant foreign portfolio investment (FPI) outflows totaling $16.5 billion during the 2025-26 fiscal year, primarily impacting the equity market. India's Forex Reserves Drop By $7.5 Billion To 681.38 Billion Prime Minister Narendra Modi has also made multiple public appeals to countrymen to conserve forex by cutting down on foreign travel, limiting fuel use and refraining from gold buys for a year.
The decline in reserves follows heavy FPI liquidation, with $16.5 billion pulled from Indian equities throughout the fiscal year. To curb further depletion, Prime Minister Modi has publicly urged citizens to reduce foreign travel, fuel consumption, and gold purchases to stabilize domestic forex demand.
While the $681.38 billion balance remains a significant cushion for import coverage, the ongoing FPI exodus reflects investor hesitation amid shifting global interest rate policies. The Reserve Bank of India likely utilized a portion of these reserves to buffer the rupee against volatility during this period of capital flight.
- Net FPI Outflow (2025-26): $16.5 billion
- Current Forex Reserve Level: $681.38 billion
- Primary sector for outflows: Equity
- Lead regulator: Reserve Bank of India
Glossary
Foreign Portfolio Investment (FPI): Capital inflows from non-residents into Indian financial assets like stocks and bonds.
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