India’s $691.1 Billion Forex Reserves Capable of Covering Over 8 Months of Imports

India’s Foreign Exchange Reserves remained sufficient to cover more than 8 months of merchandise imports in FY26, even as imports touched record levels during the year, as per The Moneycontrol Analysis report. 

Foreign currency assets stood at $552.3 billion at the end of FY26, according to a Moneycontrol analysis. Based on India’s merchandise import bill of $775 billion in 2025-26, these assets could finance nearly 260 days of imports, or 71.3% of annual imports. 

Total Reserves Stand at $691 Billion 

Including gold reserves, India’s total foreign exchange reserves stood at $691.1 billion at the end of FY26. This was equivalent to 89.2% of annual imports. 

Gold holdings accounted for around $115 billion of the reserves. The overall reserve position, though lower than previous years, remained above levels seen during earlier external sector pressures. 

Foreign currency assets declined from $567.6 billion in FY25 to $552.3 billion in FY26. At the same time, the country’s import bill rose sharply to a record $775 billion. 

Import Cover Below Pandemic Highs 

India’s import cover has reduced from the unusually high levels recorded during the pandemic years. In FY21, reserves were enough to cover 497 days of imports as imports remained weak during the COVID-19 disruption period. 

The figure later declined to 322 days in FY22 and 288 days in FY25. The FY26 level of 260 days was broadly in line with FY23. 

Over the last 12 years, foreign currency assets have covered an average of 86% of annual imports. During FY05 to FY14, the average import cover stood at 84.6%. 

Comparison With Earlier Crises 

The current reserve position remains stronger than during the FY91 balance-of-payments crisis. At that time, foreign currency assets had dropped to $2.2 billion, enough to cover only 34 days of imports. 

Total reserves, including gold, stood at $5.8 billion and covered 24.2% of annual imports. Following the 1973 oil crisis, reserves had fallen to 13.7% of annual imports, while foreign currency assets could finance around 50 days of imports. 

Commodity Prices Add Pressure 

The government recently urged citizens to conserve fuel, defer gold purchases, and avoid unnecessary foreign travel amid rising commodity prices and geopolitical tensions. 

The latest reserve data shows that India’s external position remains stable despite higher import costs and pressure on the rupee. 

Read More: Government Links Renewable Energy Adoption with State Fiscal Incentives: Pralhad Joshi! 

Conclusion 

India’s reserve position remains stronger than levels seen during earlier balance-of-payments pressures, although import cover has weakened compared with recent years. 

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