India ramps up gold reserve build-up

Stacking up India's gold purchases last year were the highest since 77.5 tonnes in 2021.

- Shayan Ghosh & Ram Sahgal

Gold's share in India's foreign exchange reserves is higher than that of developing peers as the country's central bank quietly ramped up purchases of the precious metal last year amid global trade and geopolitical uncertainty.

The pace of accretion is higher than that of most other nations facing US tariffs, according to a Mint analysis of data by the World Gold Council (WGC). As of June, 13.1% of India's total reserves worth $711 billion were in gold, compared with 9.6% a year earlier.

Only the Philippines, which is facing a 19% tariff, comes close with 12.9% gold in total reserves as of June, up from 9.4% in the same month last year. The US has imposed 50% tariffs on India, including a penalty for buying Russian oil.

For China, with a 30% US duty, gold accounts for 6.7% of its reserves. However, India's aggregate 880-tonne bullion reserves valued at $93 billion are much smaller than China's 2,298.5 tonnes of gold worth $242.9 trillion, according to the WGC.

Reserve Bank of India (RBI) was the third-largest buyer of the yellow metal in 2024 at 72.6 tonnes, behind Poland's 89.5 tonnes and Turkey's 77.4 tonnes. Global central banks increased their gold buying as Russia's invasion of Ukraine triggered geopolitical tensions.