In a strategic move, the Reserve Bank of India (RBI) has repatriated 100 tonnes of gold from the UK's vaults to India, marking the first such transfer of precious metal since 1991. According to reports from the Times of India, official sources indicate that a similar quantity of gold may be transported to India in the coming months. This decision was made for logistical reasons and to diversify storage locations. As of the end of March, the RBI held 822.1 tonnes of gold, with 413.8 tonnes stored overseas. The central bank added 27.5 tonnes of gold during the last financial year.
Traditionally, many central banks, including India's, have stored gold at the Bank of England, with some of the reserves in London dating back to pre-Independence times. "RBI started purchasing gold a few years ago and decided to review storage locations periodically. With the buildup of overseas stocks, it was decided to bring some of the gold to India," an official stated.
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Gold holds significant emotional value for many Indians, especially after the Chandra Shekhar government pledged gold in 1991 to address the balance of payments crisis. Over the past few years, the RBI has steadily increased its gold reserves through purchases, reflecting the economy's strength and confidence, a stark contrast to the 1991 situation.
Transporting 100 tonnes of gold, nearly a quarter of India's domestic stock at the end of March, was a complex logistical task requiring months of planning and precise execution. The operation involved close coordination between the finance ministry, RBI, and various government departments, including local authorities.
Initially, the RBI secured a customs duty exemption for importing the gold, with the central government foregoing revenue on this sovereign asset. However, there was no exemption from the integrated GST, which is shared with the states. The gold was transported via a special aircraft with detailed security arrangements. The move is also expected to help the RBI save on storage costs paid to the Bank of England, although these costs are relatively minor. Within India, the gold is stored in vaults at the RBI’s old office building on Mumbai’s Mint Road and in Nagpur.