In India, gold is not just a piece of jewelry; it is something deeply connected with emotions. Recently, Prime Minister Narendra Modi appealed to Indians not to buy gold for at least one year amid the deepening global economic crisis and ongoing tensions in West Asia. The purchase of gold is directly linked to our foreign exchange reserves. India has to pay for every ounce of gold in U.S. dollars. The more gold that is purchased, the greater the demand for dollars becomes, and as demand rises, the value of the dollar also increases.
The Government of India has also begun taking measures to strengthen the economy. India has started efforts to increase its gold reserves. It is noteworthy that over the last two decades, India has consistently increased its gold holdings. On the other hand, for Indian families, gold is not only a fashion statement in the form of traditional jewelry, but also serves as a symbol of prosperity, security, and long-term protection against inflation. According to estimates, the total value of gold owned by Indian households has crossed 5 trillion dollars (approximately ₹450 lakh crore). This figure is even higher than the country’s total GDP of 4.1 trillion dollars, or about ₹370 lakh crore. This has happened because gold prices have reached record highs.
According to one report, Indian households collectively hold around 34,600 tons of gold. “This figure reflects the cultural, financial, and psychological importance of gold in India’s economy.” It is generally believed that when the value of an asset rises, people feel wealthier and spend more. This is called the “wealth effect.” In India, about 75–80 percent of gold is held in the form of jewelry. People view it as a long-term saving and a part of tradition.
Today, the world is changing rapidly. Amid geopolitical tensions, economic uncertainty, and fluctuations in global markets, gold is once again emerging as a strong and safe investment. In India, the responsibility of managing this strategy lies with the Reserve Bank of India (RBI), which has rapidly increased its gold reserves in recent years. The growing tensions between the U.S. and Iran are affecting the entire world, and India’s economy is also feeling the impact. The situation has become so serious that India is now moving swiftly to strengthen its economic security. As part of this effort, India is bringing back the gold stored abroad.
According to the latest RBI report covering October 2025 to March 2026, India currently possesses a total of 880.52 metric tons of gold. Around 77 percent of it — nearly 680 tons — is now safely stored within the country itself. In just six months, the RBI added approximately 104.23 metric tons of gold to its reserves. Meanwhile, 197.67 tons of gold are held with the Bank of England and the Bank for International Settlements, while 2.8 tons are kept as deposits.
Considering the current global situation, India is rapidly taking steps to protect itself from international risks. The scale of this effort can be understood from the fact that 104.23 tons of gold were brought back to the country in just six months. It is worth noting that until March 2023, only 37 percent of India’s gold was stored domestically. This rapid shift shows that India is no longer taking external risks lightly. In fact, events such as the Russia–Ukraine war and the freezing of reserve funds belonging to Afghanistan and Russia by Western countries have alarmed central banks around the world. The world has realized that sovereign assets stored in foreign countries are not entirely safe from political decisions. In today’s fragile global monetary system, if gold is not under your direct control, then it is not truly yours. India’s move can therefore be seen as a form of “strategic insurance.”
In times of crisis, gold can provide liquidity only if it is within the country’s own reach. Therefore, India is rapidly bringing back its gold stored abroad. Not only India, but several other countries are also repatriating their gold to protect themselves from foreign risks. France brought back 129 tons of gold from the Federal Reserve Bank of New York to Paris in early 2026. Germany is also reconsidering the security of its 1,236 tons of gold stored in New York. In the current era of a weakening global order, central banks around the world are increasingly believing that if the gold is not physically with them, then it is effectively not theirs.
At current gold prices, India had been paying nearly 100 million dollars annually (around ₹950 crore) to the Bank of England as custody fees. This expense will now be avoided. Gold will also become directly available for liquidity management in India’s financial markets. If needed, the RBI will be able to use it immediately to support the rupee or raise dollars through swap arrangements.
Thirty-five years ago, during the Gulf War, India’s foreign exchange reserves had fallen to less than the equivalent of three weeks of imports. In that situation, India had to borrow 7 billion dollars from the International Monetary Fund (IMF). To secure the loan, India had to pledge 67 tons of gold from its reserves. Out of this, 47 tons were sent to the Bank of England, while 20 tons were transported by chartered aircraft to the Union Bank of Switzerland. At that time, India’s total gold reserve was only 333 tons, meaning nearly 20 percent of the country’s gold had to be mortgaged.
Just imagine — the same Bank of England and the same Switzerland where India once had to pledge its gold, but in 2026, even amid global tensions, India is bringing its gold back from abroad. It is withdrawing gold from the very Bank of England where it was once forced to pledge it. Back then, India’s foreign exchange reserves were only around 1 billion dollars. Today, they stand at nearly 700 billion dollars — about 700 times higher. Therefore, bringing gold back in 2026 is a matter of pride for India. That is why this move is being called the country’s “Golden Decision.”
