BANGALORE: Developing nation like India, with its investments in the U.S. government bonds reaching a new high at $73 billion in June, is now among the 16th top lender to the world's most powerful economy, The United States. It is revealed that India has lent more than developed countries like Canada, Germany or France to the U.S., reports Gayatri Nayak of The Economic Times.

According to the latest data released by the U.S. treasury department, Indian investors mainly the Reserve Bank of India, over the past year have raised exposure to U.S. treasury securities by 19 percent. This means India, at present accounts 1.2 percent of total foreign investments in U.S. bonds of about $6 trillion.

Saugata Bhattacharya, chief economist at the Axis Bank exclaimed, "The rise of India's Forex holdings in U.S. treasuries makes sense on various counts," reports ET.  "First, the bulk of our Forex holdings are in U.S. dollars. Second, RBI is probably replenishing some U.S. securities holdings it would have depleted when it was selling U.S. securities while intervening in Forex markets last year in defending the rupee," he added.

Bhattacharya further stated that the investments may get more productive as U.S. is likely to be the first major nation to increase rates in 2015. Also, with the U.S. economy now back on track, it is believed that this country is a safe place for investments.

On the other hand, with the yields on other major sovereign papers like Japan and Euro area have remained low, the U.S. government paper appears more attractive, according to a treasury official with a private bank.

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