India buys U.S. debts worth $38.2 Billion

By siliconindia   |   Monday, 25 May 2009, 23:37 IST   |    9 Comments
Printer Print Email Email
India buys U.S. debts worth $38.2 Billion
Bangalore: As the recession-hit U.S. economy is groping in the dark over uncertain financial position, India increased its investment in American debt securities by three times to $38.2 billion. Till March 2008, nation's investment in American debt stood at $11.8 billion. According to the data from the U.S. Treasury Department, India has bought American debt instruments worth $ 38.2 billion till March 2009. In the span of six months from October'08 to March'09, India's exposure to U.S. surged by $20 billion. This investment has been kept at high parameter, as the world's largest economy was rattled by the then-famed Lehman Brothers filing for bankruptcy in mid-September. Considered to be one of the safest investment bets, India had invested $18.3 billion in October 2008 in the American securities, which soared to $38.2 billion in March. Among the foreign countries, neighbouring China has the highest investment of $767.9 billion followed by Japan with $ 686.7 billion in U.S. debts till March 2009. Japan is considered to be the world's second largest economy. After entering into recession in December'07, the U.S. GDP has been shrinking on regular basis. In the first three months of this year, the U.S. GDP shrank 6.1 percent, whereas it had declined 6.5 percent in the December quarter. On the other hand, the weak financial system of U.S. is coming into fray of whole world as more than 46 banks have been closed since September 2008 and a majority of them are small and regional lenders. This is the reflection of weak financial system in the country. For reviving economy, the U.S. government has come up with many measures. It has released $700 billion rescue package and plans to mob up toxic assets worth nearly $1 trillion from the financial system.