India Slashes US Treasury Holdings by 21% in 2025, First Decline in Four Years

• India's holdings in US Treasury notes dropped by 21% to $190.7 billion between October 2024 and October 2025.
• This marks the first annual decline in India's US Treasury investments in four years, signaling a strategic shift.
• The reduction is driven by a reassessment of reserve allocation and diversification, not just yield considerations.
• Economists link the move to a softer US dollar outlook and global geopolitical risks, prompting a shift away from dollar-denominated assets.
• India is likely reallocating reserves into alternative assets like gold, other sovereign bonds, and non-dollar currencies.

Why It Matters: India significantly reduced its US Treasury holdings, indicating a strategic shift towards diversifying its foreign exchange reserves.