India has invested nearly ₹20 lakh crore (approximately USD 216 billion) in US Treasury Bonds. While this may appear surprising given America’s mounting debt of over USD 34 trillion, the decision reflects India’s strategy to preserve financial security and leverage the global dominance of the US dollar.
Why US Bonds Remain Attractive
The US raises funds from other nations through Treasury Bonds, Bills, and Securities—essentially official loan agreements that promise repayment with interest. Despite its debt, the US continues to be a preferred borrower due to global trust in its economic strength and ability to meet obligations. For countries like India, these bonds are a safe and dependable way to invest foreign currency reserves.
Debt Per Capita and Global Borrowing
In 2020, the US national debt stood at USD 23.4 trillion, amounting to USD 72,309 in debt per citizen. Congressman Alex Mooney recently warned that the debt is projected to reach USD 29 trillion, with China and Japan being the largest foreign creditors. Despite such concerns, the US retains strong borrowing power due to the continued faith in the dollar worldwide.
India’s Gains from US Bond Investments
India’s investment in US Treasury Bonds offers steady and low-risk returns, contributing to long-term financial stability. It also serves as a buffer during global economic uncertainties. Although this investment strategy rarely makes headlines, it plays a crucial role in enhancing India’s economic standing on the global stage.
By holding a significant amount in US Treasury Bonds, India not only secures safe returns but also reinforces its role in the global financial system. The strategy highlights a silent yet impactful approach to economic resilience and international engagement.
