Even as the world's largest continued to reel under one of the worst recession in 80 years, India has been steadily increasing its exposure to American debt since May last year, when the holdings were worth just USD 10.3 billion.
According to data available with the US Treasury Department, India bought American debt worth USD 38.8 billion till May 2009.
India has purchased more American debt since October 2008, when the financial turmoil turned for the worse with the failure of then Wall Street major Lehman Brothers.
India's exposure has jumped more than two-fold till May this year, in comparison with just USD 18.3 billion in October last year. Till April this year, India's holding stood at USD 38.5 billion.
India has foreign exchange reserves of more than USD 260 billion.
Neighboring China continues to be the biggest buyer of American debt, with holdings worth USD 801.5 billion till May 2009.
At the second spot is Japan, with holdings to the tune of USD 677.2 billion.
Among the BRIC (Brazil, Russia, India and China) nations, India has the least exposure. As on May 2009, Brazil and Russia purchased US debt of USD 127.1 billion and USD 124.5 billion, respectively.
To battle the economic crisis, the Federal government has pumped in billions of dollars into the system including a mammoth USD 787 billion stimulus package. In addition, the US has come up with various plans to ensure steady credit flow.
After several months of financial turbulence, the US economy is slowly showing possible signs of stabilisation.
In the second quarter of 2009, the US GDP shrank less than expected at one per cent while the unemployment rate slipped to 9.4 per cent in the month of July.
Further, many of the corporates have reported better second quarter results, spurring hopes of an economic turnaround by the end of this year.
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