India Slashes US Treasury Holdings by 21% in Strategic Forex Shift

• India's US Treasury holdings dropped by 21% from $241.4 billion to $190.7 billion between October 2024 and October 2025.
• This marks the first year-on-year decline in India's US Treasury investments in four years.
• The reduction occurs despite attractive US bond market yields (4.0%-4.8% for 10-year Treasury Yield).
• Economists like Dipanwita Mazumdar suggest this reflects India's strategic diversification and reduced dollar dependence.
• India is reportedly shifting reserves to alternative assets like gold and non-dollar currencies amid geopolitical risks and anticipated dollar softening.

Why It Matters: India is strategically diversifying its foreign exchange reserves, reducing reliance on the US dollar and Treasuries.