The Reserve Bank of India (RBI) has relocated over 100 tonnes of gold from the UK to its vaults in India. This marks the first significant addition of precious metal to the domestic stock since at least early 1991. According to official sources, a similar quantity of gold may be transferred to India in the coming months for logistical reasons and diversified storage.
At the end of March, the RBI held 822.1 tonnes of gold, with 413.8 tonnes stored overseas. The central bank has been among those purchasing gold in recent years, adding 27.5 tonnes during the last financial year. Traditionally, the Bank of England has been a primary storage facility for central banks, including India, with some gold stocks dating back to pre-independence days.
An official explained, “RBI started purchasing gold a few years ago and decided to undertake a review of where it wants to store it, something that is done from time to time. Since the stock was building up overseas, it was decided to get some of the gold to India.”
For many Indians, gold holds emotional significance, especially after the Chandra Shekhar government pledged the precious metal to address the balance of payments crisis in 1991. While the RBI purchased 200 tonnes of gold from the International Monetary Fund around 15 years ago, recent years have seen a steady increase in gold stocks through purchases by the Indian central bank. A source noted, “It shows the strength of the economy and the confidence, which is in sharp contrast to the situation in 1991.”
Transporting 100 tonnes of gold, which constitutes nearly a fourth of the domestic stock as of March, was a significant logistical challenge requiring months of planning and precise execution. This effort involved close coordination between the finance ministry, RBI, and various government departments, including local authorities.
Initially, the RBI obtained a customs duty exemption to import the metal into the country, with the Centre “foregoing revenue” on what is a sovereign asset. However, there was no exemption from integrated GST, which is shared with the states. The gold transfer required a special aircraft and detailed security arrangements. Additionally, this move will help the RBI save on some storage costs paid to the Bank of England, though the amount saved is not substantial.
Domestically, the gold is stored in vaults at the RBI’s old office building on Mumbai’s Mint Road as well as in Nagpur.
