India and Japan have renewed their Bilateral Swap Arrangement (BSA), maintaining the facility at up to $75 billion, effective February 28, 2026. The Reserve Bank of India announced the renewal on March 2, underscoring the continuing financial cooperation between the two nations amid a period of global economic uncertainty.
The Bank of Japan, acting as agent for Japan’s Ministry of Finance, and the Reserve Bank of India signed the third Amendment and Restatement Agreement of the BSA. The arrangement serves as a two-way currency swap framework that allows both central banks to exchange their local currencies—the Indian rupee and the Japanese yen—against the US dollar.
The scale of the facility remains unchanged from previous agreements. This $75 billion swap line was first set at this level in 2019, approved by India’s cabinet to enhance balance of payments resilience and provide short-term liquidity support in times of external stress. It was previously renewed in February 2022 and again in February 2025, marking the current extension as the third amendment to the pact.
Both governments have stated that the purpose of the agreement is to strengthen and complement other financial safety nets while deepening financial cooperation between the two countries. The renewed arrangement provides India with an additional line of defense in managing foreign exchange pressures and exchange rate volatility.
Japan maintains similar bilateral swap frameworks with several Asian partners, including the Philippines, Indonesia, Thailand, Singapore, South Korea, and Malaysia. The $75 billion India-Japan facility remains one of the largest in Japan’s network of such regional arrangements, reinforcing both nations’ roles in promoting financial and economic stability in Asia.
