New Delhi, Jan. 22 -- India had $686 billion of foreign exchange (forex) reserves at the start of 2026. This number is often trotted out as evidence of the Indian economy's external invulnerability. It's a long way from the 1991 crisis, when India's forex reserves plunged to barely $1 billion. Faced with a situation in which forex reserves covered only about three weeks' worth of essential imports, the Reserve Bank of India (RBI) was forced to pledge its gold with the Bank of England to raise a foreign currency loan. That set the stage for India's economic reforms and opening up to foreign investment. By 2004, India's forex reserves had reached $100 billion, and have continued to grow in the following years.

India now ranks consistently ...