The Reserve Bank of India has repatriated 100 tonnes of gold from the UK to its domestic vaults for logistical reasons and diversified storage. This significant shift underscores India's economic strength and confidence, reflecting a proactive approach to managing gold reserves and enhancing storage efficiency.
In a significant move reflecting India's economic resilience, the Reserve Bank of India (RBI) has repatriated over 100 tonnes of gold from the UK to its domestic vaults. This marks the first substantial addition of precious metal to India's local reserves since early 1991.
Sources have indicated that a similar quantity of gold may be transferred to India in the coming months for logistical reasons and diversified storage. By the end of March, the RBI held 822.1 tonnes of gold, with 413.8 tonnes stored overseas. In recent years, India has been among the central banks actively purchasing gold, adding 27.5 tonnes in the last financial year alone.
Traditionally, many central banks, including India's, have stored gold at the Bank of England, with some stocks dating back to pre-Independence days. However, the RBI has recently reviewed its storage strategy, leading to the decision to bring some of this gold back to India. “Since stock was building up overseas, it was decided to get some of the gold to India,” an official explained.
For many Indians, gold holds significant emotional and historical value, especially recalling the 1991 balance of payments crisis when the Chandra Shekhar government pledged gold. In contrast, the recent repatriation underscores the strength of the Indian economy and growing confidence. “It shows the strength of the economy and the confidence, which is in sharp contrast to the situation in 1991,” noted a source.
The logistical effort to move 100 tonnes of gold, representing nearly a quarter of India's domestic stock as of March, was immense. The operation required meticulous planning and coordination between the finance ministry, RBI, and various government agencies, including local authorities. Customs duty exemptions were secured to facilitate the shipment, although integrated GST was still applied, as it is a shared tax between the Centre and the states.
The gold was flown to India on a special aircraft with stringent security measures. This strategic move not only strengthens India's economic foundations but also helps the RBI save on storage costs paid to the Bank of England, albeit modestly.
Domestically, the repatriated gold is stored in vaults located in the RBI’s old office building on Mumbai’s Mint Road and in Nagpur. This move demonstrates India's proactive approach to managing its gold reserves, ensuring both economic security and logistical efficiency.
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