RBI continues to bring more gold back to India. Here’s why

Over the last few years, central banks around the world have been increasing their gold reserves. The Reserve Bank of India is no exception. But not only is India’s central bank raising its gold deposits, but it is also storing more of it in India. 

According to the half-yearly data released by the RBI, as of March 2026-end, it held 880.52 metric tonnes of gold. Out of this, 680.05 metric tonnes were held domestically. 

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In comparison, at the end of March 2025, the RBI held 879.59 metric tonnes of gold, of which 511.99 metric tonnes were held domestically. So, in the past year alone, close to 168 metric tonnes of gold has been brought back. 

In March 2024, 822.10 metric tonnes of gold, of which 408.31 metric tonnes were held domestically. Similarly, in March 2023, it had 794.64 metric tonnes of gold, and only 301.10 metric tonnes of that was held domestically.

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Why have central banks been buying gold? 

Central banks have been amassing gold reserves in the last few years as they have looked to diversify their reserves away from the US dollar amid heightened geopolitical uncertainties. Gold also acts as a hedge against inflation. 

According to the World Gold Council, central banks purchased 863 tonnes of gold in 2025. In 2024, they had amassed 1,045 tonnes, and in 2023 they bought 1,037 tonnes. 

While gold purchases last year were lower than in 2024, they remained significantly elevated compared with the annual average purchases of 473 tonnes between 2010-21.

The sustained gold buying by central banks is “motivated by reserve diversification, reduced confidence in dollar-denominated assets, and heightened geopolitical risk. This official-sector demand is price-insensitive and long-term in nature, creating a structural underpinning for gold prices,” Yogesh Shah, senior director at CareEdge Ratings said recently in a report. 

Like other central banks, the RBI has also diversified its forex reserves, which include currencies like the US dollar and euro; apart from some gold, its gold reserves have been on an upswing, particularly in the years post the COVID 19 pandemic, when global uncertainties have also risen. 

Why RBI continues to bring back its gold? 

The Reserve Bank has been bringing more gold back that it had stored overseas, particularly that which has been in safe custody with the Bank of England (BOE). 

In March 2023, for instance, 437.22 metric tonnes of gold was held overseas in safe custody with the BOE and the Bank for International Settlements (BIS). That has steadily come down to 387.26 metric tonnes as of March 2024, 348.62 metric tonnes in March 2025 and 197.67 metric tonnes as of March 2026.

Geopolitical concerns may be a key reason behind the move. There is an ongoing conflict between Russia and Ukraine and the US and Iran. Amid such uncertainties, it’s always good to have control over your gold reserves. 

It’s worth noting that back in 2022, the US and its allies restricted the Russian central bank from accessing its overseas gold reserves. 

Geopolitical uncertainties apart, typically the Reserve Bank also has to pay a fee for gold stored with the BOE or BIS. 

It’s also worth remembering that in 1991, when India faced an acute foreign exchange crisis, it was forced to transfer some of the gold abroad to secure emergency loans.

Things have come back a full circle; India is now sitting on strong reserves.

In early 1991, India had just about $1.2 billion in reserves, barely enough for a few weeks of imports. At the end of March 2026, the gold reserves stood at over $691 billion.