It reflects deeper economic ties, rupee stability, and rising global financial influence.
NEW DELHI: India’s investments in US financial assets reached $265 billion by June 2024, a 40.6% increase from $188.582 billion in June 2020, nearly doubling the $133 billion held in 2017, according to the recently released U.S. Treasury’s Foreign Portfolio Holdings data. In layman’s terms, this increase signals a stronger economic bond between New Delhi and Washington, the stabilising of the rupee, participation in the U.S. economic growth, boosted investment opportunities, and a reinforced role for India in global finance. The increase in India’s investments aligns with a global surge in foreign ownership of U.S. securities, which hit $30.9 trillion in 2024, up by $4 trillion from 2023. An analysis of India’s investment trajectory shows a steady rise: $188.582 billion in June 2020, $229.912 billion in June 2021, a dip to $217.817 billion in June 2022 due to global volatility, a recovery to $248.024 billion in June 2023, and reaching $265 billion in June 2024. In contrast, China’s holdings declined from $1.432 trillion in June 2023 to $1.401 trillion in June 2024, reflecting a reduction in Treasury debt, while Pakistan’s investments fell sharply from $1.487 billion in June 2022 to $0.491 billion in 2023 and $0.155 billion in 2024. Segment-wise, India’s participation in U.S. Treasury debt grew 32.3% from $182.628 billion in 2020 to $241.64 billion in 2024, with a focus on long-term securities. In 2020, it was $151.403 billion long-term and $31.225 billion short-term. In 2021, it reached $220.19 billion, with $209.736 billion long-term and $10.454 billion short-term. In 2022, it fell to $208.523 billion, with $205.794 billion long-term and $2.729 billion short-term. In 2023, it rose to $235.107 billion, with $232.833 billion longterm and $2.274 billion short-term. By 2024, it was $241.64 billion, with $233.02 billion long-term, comprising 96.4% of Treasury holdings, and $8.62 billion shortterm. Treasury debt refers to the total amount of money a government (in this case, the U.S.) owes to its creditors by issuing securities like bonds and bills to finance its spending. Similarly, equities surged by 298% from $5.544 billion (2.9% of holdings) in 2020 to $22.06 billion (8.3%) in 2024, with interim values of $9.03 billion in 2021, $8.422 billion in 2022, and $12.063 billion in 2023 (an 83% jump to 2024). Agency debt remained negligible, growing from $0.124 billion in 2020 to $0.133 billion in 2021, $0.214 billion in 2022, $0.158 billion in 2023, and $0.14 billion in 2024. (Agency debt refers to debt securities issued by U.S. government-sponsored enterprises or federal agencies, excluding the Treasury Department, to fund public purposes like housing, agriculture, and education.) On the other hand, corporate debt grew from $0.286 billion in 2020 ($0.22 billion long-term, $0.066 billion short-term) to $0.72 billion in 2024, with interim values of $0.559 billion in 2021, $0.658 billion in 2022, and $0.696 billion in 2023 ($0.623 billion long-term, $0.073 billion short-term). RBI’s focus on U.S. Treasuries, as detailed in the report, has grown from $182.628 billion in 2020 to $235.107 billion in 2023 and $241.64 billion in 2024. India’s private investors, such as mutual funds and Foreign Portfolio Investors, hold $22.06 billion in equities and $0.72 billion in corporate debt in 2024, seeking profits in U.S. markets, with equity holdings rising from $8.422 billion in 2022 to $12.063 billion in 2023. Of the total global participation in U.S. securities, equities account for 55% of foreign portfolios, up from 23% in 2009 due to strong U.S. stock prices, with India’s equity share rising from 2.9% in 2020 to 8.3% in 2024, though far below the equity-heavy portfolios of the UK ($3.14 trillion) and Japan ($2.59 trillion). China’s equity holdings grew from $309.363 billion in 2023 to $361.818 billion in 2024, while Pakistan’s equities dropped from $0.246 billion to $0.106 billion. Foreign ownership of Treasuries, at $8.2 trillion (33% of the total), includes private investors holding $4.4 trillion, overtaking official investors ($3.8 trillion) since 2023. India’s Treasury holdings, focusing on long-term securities with a 6.3-year average maturity, are a growing part of this trend, unlike China’s decline from $834.087 billion in 2023 to $780.39 billion in 2024, or Pakistan’s fall from $1.329 billion in 2022 to $0.04 billion in 2024. Global corporate debt holdings reached $4.2 trillion, mostly private, with India’s $0.72 billion in 2024 reflecting caution, compared to China’s $24.782 billion and Pakistan’s $0.009 billion. The RBI’s Treasury holdings, rising from $208.523 billion in 2022 to $241.64 billion in 2024, demonstrate trust in U.S. economic stability, supporting India’s reserves while funding U.S. debt needs. The equity surge, from $8.422 billion in 2022 to $22.06 billion in 2024, reflects private investors’ confidence in U.S. companies, linking Indian wealth to American growth.