Gold’s share in India’s reserves hits 11.4% as RBI goes on buying spree

India's gold share in foreign exchange reserves has surged to 11.4% in 2024, up from 6.7% in 2019, driven by the Reserve Bank of India's aggressive purchasing strategy. This increase is significant for UPSC aspirants as it relates to GS Paper 3, which covers economic development and financial management. Last Updated: 2025-04-22

Key Facts About Gold's Share in India's Reserves

• India's gold share in forex reserves: increased to 11.4% in 2024.
• Growth from: 6.7% in 2019 largely due to RBI's purchases.
• Forex reserves: reached USD 677.84 billion as of April 2025.
• Increase of: USD 892 million in Foreign Currency Assets.
• Gold reserves rose by: USD 638 million.
• Decline of: USD 6 million in Special Drawing Rights.
• Components of forex reserves: include FCA, gold, SDRs, and RTP.
• RBI purchased gold in: 11 out of 12 months in 2024.
• Added: 2.8 tonnes in first two months of 2025.
• Poland led global gold purchases: with a 25% increase.
• Turkey added: 74.8 tonnes to its reserves.
• Some countries, like the Philippines: reduced gold holdings.
• Total global central bank gold demand: exceeded 1,000 tonnes for three consecutive years.
• Gold prices peaked at: USD 3,245 on April 14, 2025.
• Gold's value surged: over 8% since Trump's inauguration.
• Increase in gold's share: reflects India's strategic response to global conditions.

Broader Context: India's Economic Strategy

The increase in gold's share in India's foreign exchange reserves is a strategic move in response to global economic uncertainties. As India aims to strengthen its economic resilience, the rise in gold holdings aligns with its goals of enhancing financial stability and reducing dependency on volatile foreign currencies. With forex reserves at USD 677.84 billion, India ranks among the top countries globally, reflecting its robust economic position and strategic foresight.

Related Government Schemes/Policies

• Gold Monetization Scheme: Encourages individuals to deposit gold with banks to earn interest.
• Foreign Exchange Management Act (FEMA): Regulates foreign exchange transactions in India.

UPSC Relevance

This topic is relevant to GS Paper 3, particularly under the sections dealing with economic development and financial management. In the Prelims, questions could focus on the percentage of gold in forex reserves or the RBI's purchasing patterns. For Mains, candidates might explore themes such as the impact of gold reserves on economic stability or the strategic significance of gold in India's financial policy.

FAQ Section

What is gold's share in India's reserves?

Gold's share in India's foreign exchange reserves has increased to 11.4% in 2024, reflecting a significant rise from 6.7% in 2019 due to the Reserve Bank of India's purchasing strategy.

Why is gold's share important?

Gold's increasing share is crucial as it enhances India's financial stability and reduces vulnerability to global economic fluctuations, making it a strategic asset in the country's forex reserves.

What are the key features of India's gold reserves?

India's gold reserves have seen a substantial increase, with the RBI purchasing gold in 11 out of 12 months in 2024, contributing to a total forex reserve of USD 677.84 billion.