Nearly $750bn shield: How India built record forex reserves amid US-Iran war

In May 2026, amid the raging US-Iran war, PM Narendra Modi urged citizens to reduce gold buying, travel abroad and fuel consumption to preserve India’s foreign exchange reserves which had come under pressure due to rupee’s depreciation exacerbated by the Middle East conflict.Before the start of the war at the end of February, India’s forex reserves had hit a record high, but the Reserve Bank of India’s (RBI) steps to curb rupee’s slide and the drain due to rising fuel costs and gold import values strained the forex reserves.Now, months after the start of the conflict, India has reported its highest ever foreign exchange reserves of over $740 billion! Forex reserves hit a record high last week itself at $729 billion, and this week has seen a further rise.