Why in News

The Reserve Bank of India (RBI) transferred 168.06 metric tonnes (MT) of gold from foreign vaults to domestic storage in FY 2025–26 — the largest annual gold repatriation in the RBI’s history. India’s total gold reserves now stand at 880.52 MT (as of March 2026), with 77% held domestically — a dramatic shift from just 38% in March 2023. Gold now accounts for 16.7% of India’s total forex reserves.

Gold Reserve Data — Key Numbers

Parameter Value
Total RBI gold reserves (March 2026) 880.52 MT
Gold repatriated in FY 2025–26 168.06 MT
— H2 FY26 alone 104.23 MT
Gold repatriated in FY 2024–25 107.21 MT
Gold repatriated in FY 2023–24 103.68 MT
Gold held domestically (March 2026) 77% (~677 MT)
Gold held domestically (March 2023) 38% (~280 MT)
Gold remaining overseas (Bank of England/BIS) 197.67 MT
Gold as % of total forex reserves 16.7% (up from 11.7% in 2024–25)

Why Is India Repatriating Gold?

1. Geopolitical Risk — The Russia Precedent

After Russia’s invasion of Ukraine (2022), Western nations froze ~$300 billion of Russia’s foreign exchange reserves held at Belgian-based Euroclear and other Western custodians. This demonstrated that foreign-held reserves can be weaponised as a geopolitical tool. India, observing this, accelerated repatriation to reduce vulnerability.

2. Reducing Custodial Concentration Risk

Historically, India’s gold was stored primarily at the Bank of England (London) and the Bank for International Settlements (BIS) (Basel, Switzerland). Domestic storage reduces counterparty and custodial risk.

3. Confidence in Domestic Storage Infrastructure

The RBI has invested in high-security domestic vaults — primarily at its Nagpur and Mumbai offices. Increased domestic capacity enabled the accelerated repatriation.

4. Earnings and Cost Optimisation

Gold stored overseas earns minimal lease income. Domestic gold can be used for gold swap agreements and other liquidity tools more flexibly.

India’s Forex Reserves — Composition

Component Status
Total forex reserves ~$680–700 billion range (as of early 2026)
Foreign currency assets (FCA) Largest component (~80%)
Gold ~16.7% (880.52 MT)
SDRs (Special Drawing Rights) Small component
Reserve tranche at IMF Small component

India’s Historical Gold Journey

Year Event
1991 India pledged/sold 67 MT of gold during BOP crisis: SBI sold 20 MT to Union Bank of Switzerland (UBS); RBI pledged 47 MT to Bank of England and Bank of Japan — a national humiliation that drove future reserves policy
2009 RBI purchased 200 MT from IMF at $1,045/oz — one of the largest gold purchases by any central bank
2022 Russia’s asset freeze triggers RBI review of storage diversification
2023–24 103.68 MT repatriated
2024–25 107.21 MT repatriated
2025–26 168.06 MT repatriated — largest annual repatriation
March 2026 880.52 MT total; 77% in India

UPSC Relevance

Paper Angle
GS3 — Economy Forex reserves composition, gold as reserve asset, RBI’s reserve management
GS2 — International Relations Geopolitics of reserve assets, Russia sanctions, de-dollarisation
GS3 — Economy 1991 BOP crisis context, IMF role, gold pledge

Mains Keywords: RBI gold repatriation, forex reserves, Bank of England, BIS, gold as reserve asset, de-dollarisation, geopolitical risk, 1991 BOP crisis, Russia asset freeze, gold’s share in forex reserves

Prelims Facts Corner

Item Fact
RBI gold (March 2026) 880.52 MT total
Repatriated FY26 168.06 MT — record annual repatriation
Domestic share 77% (March 2026) vs 38% (March 2023)
Overseas gold 197.67 MT (Bank of England + BIS)
Gold in forex reserves 16.7% (up from 11.7% in FY25)
1991 context 67 MT: SBI sold 20 MT to UBS; RBI pledged 47 MT to Bank of England + Bank of Japan
2009 purchase RBI bought 200 MT from IMF at $1,045/oz
Domestic vault locations RBI Nagpur and Mumbai offices
Trigger for repatriation Russia’s $300 billion asset freeze (2022)