RBI Reclaims Gold Reserves: A Bold Move Towards Economic Sovereignty

• The RBI’s move demonstrates India’s growing confidence as a global power and an indicator of reducing its dependence on the West.
• This decision was also made to prevent other countries from seizing India’s gold reserves as part of any sanctions in the event of a conflict with neighbouring countries.
• RBI’s decision to bring back its gold marks a significant chapter in India’s growth story, contrasting with 1991 when it had to store 100 tons of gold in England to stabilize an economy plagued by poverty and starvation.

The Reserve Bank of India has announced to bring back 100 metric tons of gold reserves from the Bank of England in the UK. This is the first step of RBI’s plan to get all the gold reserves stored in foreign banks. India believes that its gold will stay with itself which is an outcome of India’s growth and growing confidence. This is an excellent move to demonstrate India’s growing confidence as a global power and an indicator of reducing its dependence on the West.

Currently, RBI holds 822 tons of gold as reserves out of which 308 tons are kept in India as physical gold holding which is the gold held for backing of printed currency. Another 514 tons of gold reserves are kept in different countries for better safety. India decided to bring all the 514 tons back to India for several geopolitical reasons too. This decision was made to prevent other countries from seizing India’s gold reserves as part of any sanctions in the event of a conflict with neighbouring countries. This is particularly important given the recent example of G7 countries seizing Russia’s gold reserves stored in their territories to weaken Russia economically. India recognizes that these same G7 countries might act similarly towards India in a conflict situation, especially as India aims to reclaim the illegally occupied region of POK. Many Indians have expressed hope that India will bring all its reverses quickly.

Another reason for bringing back India’s gold reserves abroad is the growth of Indian banks like the State Bank of India which is now the most profitable entity in the country. Government entities like the SBI and LIC have grown exponentially in the past few years and are now valued higher than the GDP of main Asian and African countries. Previously India stored its gold in the Bank of England, which was renowned for its unbreakable safety and stability. This is evident in its website where it proudly claims the bank’s spotless history and mentions that there are about 200 billion pounds of gold in its reserves in 2024. India will be tasked with maintaining such high security and stability of its gold reserves as the standards and expectations are set very high.

In conclusion, RBI’s decision to bring back its gold marks a significant chapter in India’s growth story, contrasting with 1991 when it had to store 100 tons of gold in England to stabilize an economy plagued by poverty and starvation. This has been a great comeback and can well be the start of a new chapter in India’s rise to global dominance.

Hima Teja B