India buys US debts worth $38.2 bn in just one year- Finance-Economy-News-The Economic Times India buys US debts worth $38.2 bn in just one year 24 May 2009, 1334 hrs IST, PTI NEW YORK: As the recession-hit US economy is groping in the dark over uncertain financial position, India has increased its exposure to American debt securities by over three-fold to $ 38.2 billion till March compared to the year-ago period. The emerging nation's investment in the US debt stood at $ 11.8 billion in March 2008. According to the data from the US Treasury Department, India has bought American debt instruments worth $ 38.2 billion till March 2009. Interestingly, India's exposure to US debt has surged by about $ 20 billion since October 2008, when the ongoing financial turmoil turned for the worse. 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. Japan, the world's second largest economy has invested $ 686.7 billion in US debts till March 2009. The American economy officially entered into recession in December 2007 and has contracted at a rapid pace in the previous two quarters. In the first three months of this year, the US GDP shrank 6.1 per cent, whereas it had declined 6.5 per cent in the December quarter. Though corporates, banks and other financial institutions can purchase the bonds, in the case of India, the Reserve Bank accounts for large part of the lending. On the other hand, the number of bank failures in the US are rising almost every week, reflecting the weak financial situation. More than 46 banks have been closed since September 2008 and a majority of them are small and regional lenders. The US authorities has come up with many measures, including the $ 700 billion rescue package and plans to mop up toxic assets worth nearly $ 1 trillion from the financial system, to revive the economy.