Business chamber Assocham on Friday welcomed India’s foreign exchange reserves reaching an all-time high of $740.80 billion as of August 28, saying the rise reflects a robust external sector and strengthening confidence in the Indian economy.
The reserves increased by $11.48 billion during the week, marking the ninth consecutive weekly rise. Foreign Currency Assets (FCA), the largest component of India’s reserves, crossed the $600 billion milestone, rising by $9.34 billion over the previous week. Gold reserves, the second-largest component, stood at $116.41 billion.
Assocham President Nirmal K. Minda said the record accumulation of foreign exchange reserves provides a strong cushion against global economic uncertainties and external shocks.
A robust forex position will contribute to greater currency stability, strengthen macroeconomic resilience, support economic growth and enhance investor confidence, he said.
Minda added that the strong reserve position also improves India’s capacity to manage external financing requirements, strengthens the country’s global financial standing and enhances its international competitiveness.
According to the industry body, the strong reserve position provides greater policy space to navigate volatility in global financial markets, commodity prices and capital flows.
An increase in foreign exchange reserves reflects strong economic fundamentals and gives the Reserve Bank of India (RBI) greater headroom to stabilise the rupee during periods of volatility.
A robust forex kitty also enables the RBI to intervene in the spot and forward currency markets by releasing dollars when required to prevent a sharp fall in the rupee.
Meanwhile, India’s current account deficit (CAD) stood at $4.2 billion in the April-June quarter (Q1) of the current financial year, remaining steady at 0.5 per cent of GDP despite rising global prices of oil, LPG and fertilisers due to the West Asia crisis, according to data released by the RBI on Tuesday.
The CAD during the same quarter of the previous financial year was estimated at 0.4 per cent of GDP.
Net services receipts increased to $51.6 billion in Q1 of 2026-27 from $47.9 billion in the first quarter of the previous financial year, driven by a year-on-year rise in services exports across major categories such as computer services, other business services and transportation services.
Personal transfer receipts, mainly representing remittances from Indians employed overseas, also increased to $42.9 billion during the first quarter from $33.2 billion in the same period of the previous year.
Foreign direct investment (FDI) recorded a net inflow of $6.1 billion in the first quarter, up from $5.2 billion in the same quarter last year.