India forex reserves surge $7.26 billion to $674.19 billion in week to July 3
Synopsis
India's forex reserves bounced back by $7.26 billion to $674.193 billion in a single week — but the bigger story is the RBI's FCNR-B scheme quietly pulling in $3–4 billion in NRI deposits already, with bankers targeting $40–50 billion over time. The Gulf diaspora is the key variable to watch.
Key Takeaways
India's forex reserves rose $7.26 billion to $674.193 billion in the week ended 3 July 2025 .
Gold reserves increased by $2.669 billion to $105.205 billion .
SDR holdings with the IMF rose $65 million to $18.623 billion .
Reserves remain below the all-time high of $728.494 billion recorded on 27 February 2025 .
Banks have raised an estimated $3–4 billion through the revised FCNR-B scheme; bankers project $40–50 billion over time.
The Gulf region is expected to be the largest source of incremental FCNR-B inflows.
India's foreign exchange reserves climbed by $7.26 billion to $674.193 billion in the week ended 3 July 2025, reversing a decline from the prior reporting period, according to data released by the Reserve Bank of India (RBI) on Friday, 10 July. The rebound underscores the resilience of India's external buffer even as global currency markets remain volatile.
Weekly Breakdown of Reserve Components
The value of India's gold reserves rose by $2.669 billion to reach $105.205 billion during the reporting week, reflecting both valuation gains and continued accumulation. The country's holdings of Special Drawing Rights (SDRs) with the International Monetary Fund (IMF) also edged up by $65 million to $18.623 billion.
Context: Reversal After Prior Week's Dip
The uptick follows a contraction in the preceding week, when reserves fell by $5.65 billion to $666.93 billion in the week ended 26 June. Despite this recent volatility, India's reserves rank among the highest globally. However, they remain below the all-time record of $728.494 billion reached in the week ended 27 February 2025 — a gap of roughly $54 billion that analysts say reflects RBI intervention to stabilise the rupee over intervening months.
FCNR-B Scheme Driving Fresh NRI Inflows
Alongside the headline reserves data, Indian banks are reporting a gradual pick-up in overseas fund flows following the rollout of the RBI's revised Foreign Currency Non-Resident Bank (FCNR-B) deposit scheme. The banking sector has mobilised an estimated $3–4 billion through the scheme so far, according to reports, with lenders expecting collections to accelerate further this month as awareness grows among non-resident Indians (NRIs).
Bankers project the revised scheme could attract $40–50 billion in fresh FCNR-B deposits over time. Two key factors are cited: higher interest rates on offer and the RBI's decision to absorb banks' hedging costs — a structural sweetener that lowers the effective cost of participation for depositors.
Gulf Region Seen as Key Contributor
Banks have intensified outreach efforts across major overseas markets to raise awareness of the revised FCNR-B scheme. The Gulf region is expected to contribute a disproportionate share of incremental deposits, driven by the large Indian expatriate workforce based in countries such as the UAE, Saudi Arabia, and Kuwait. Bankers say inflows from the Gulf are likely to gather pace in the coming weeks as engagement campaigns reach more NRI customers.
This comes amid a broader RBI strategy to bolster the external account through non-debt inflows and diaspora savings — a playbook India has used during previous periods of rupee pressure. The combination of a strengthening reserve position and rising FCNR-B momentum could provide the RBI with greater room to manage exchange rate volatility in the months ahead.
Point of View
But the real signal is structural: the RBI's revised FCNR-B scheme is the most deliberate effort since 2013 to channel diaspora savings into the external account. With $3–4 billion mobilised already and $40–50 billion projected, the scheme has scale ambitions — but delivery will depend on whether Gulf-based NRIs, the primary target, actually move deposits at the pace bankers expect. India's reserves gap to the February peak of $728 billion is still a $54-billion story, and FCNR-B inflows alone will not close it. The RBI's decision to bear hedging costs is a meaningful subsidy; the question is whether it is priced into the fiscal arithmetic.
NationPress
10 Jul 2026
Frequently Asked Questions
What is India's current foreign exchange reserves level?
India's foreign exchange reserves stood at $674.193 billion as of the week ended 3 July 2025 , according to RBI data released on 10 July. This represents a rise of $7.26 billion from the previous week.
Why did India's forex reserves rise in the week to 3 July?
The RBI has not detailed the specific drivers, but the increase of $7.26 billion reflects a combination of valuation gains — particularly in gold, which rose $2.669 billion — and likely foreign capital inflows. It reversed a $5.65 billion decline recorded in the week ended 26 June.
What is the FCNR-B scheme and why does it matter for forex reserves?
The Foreign Currency Non-Resident Bank (FCNR-B) scheme allows NRIs to hold fixed deposits in India in foreign currencies. The RBI's revised version offers higher interest rates and covers banks' hedging costs, making it more attractive. Bankers expect it to draw $40–50 billion in fresh deposits over time, directly bolstering India's external account.
How far are India's forex reserves from their all-time high?
India's reserves peaked at $728.494 billion in the week ended 27 February 2025. At $674.193 billion, they are approximately $54 billion below that record — a gap that reflects RBI dollar sales to support the rupee during periods of market pressure.
Which region is expected to drive FCNR-B deposit growth?
Bankers expect the Gulf region to be the largest contributor to incremental FCNR-B inflows, given the large Indian expatriate population in countries such as the UAE, Saudi Arabia, and Kuwait. Outreach campaigns targeting Gulf-based NRIs are already under way.
