India's overseas trade is dominated by the US dollar and the greenback will naturally remain a major component of India's foreign exchange reserves, Reserve Bank of India (RBI) deputy governor K C Chakrabarty said today.
Bilateral trade between India and the US stood at $39.71 billion in 2008-09, according to commerce ministry data. Imports from the US formed 6.11 per cent of India's total imports.
Against this, the European Union, the country's second-biggest market, accounted for 14 per cent of India's exports. Shipments to the euro zone rose 14 per cent to $39.4 billion in the year to March 2009, according to official data.
But, Chakrabarty said, the euro is not a significant component in the country's total forex reserves as 90 per cent of trade happens in dollars.
India's holdings of US Treasuries increased by $400 million in March. According to recent US Treasury Department data, India's holdings of US Treasuries amounted to $32 billion as of end-March against $31.6 billion in February. This was down $6.2 billion year-on-year.
India's forex reserves were down $3.395 billion at $276.24 billion, including foreign currency assets worth $251.47 billion, according to RBI data released on 14 May.