India’s Gold Reserves Soar
India’s central bank has reached a historic milestone — its gold reserves have crossed the $100 billion mark, driven by surging global bullion prices. The achievement highlights how rising valuations, rather than aggressive buying, have pushed the Reserve Bank of India’s (RBI) gold holdings to new highs.
Rising Value, Slower Buying
By mid-October 2025, the total value of India’s gold reserves stood at around $102 billion, an increase of nearly $3.6 billion in just one week. Interestingly, this rise occurred despite the RBI’s reduced pace of gold purchases. In the first nine months of 2025, the RBI bought gold in only four months, adding just 4 metric tons — a steep fall compared to the 50 tons purchased in the same period last year.
The key reason for this record valuation is not heavy accumulation, but valuation gains. Global gold prices have surged nearly 65% in 2025, fuelled by persistent inflation concerns, geopolitical tensions, and investor demand for safe-haven assets. This sharp rise in prices has boosted the value of India’s existing gold holdings dramatically.
Gold’s Growing Share in India’s Reserves
Gold now makes up about 14.7% of India’s total foreign exchange reserves — the highest level in nearly three decades. Ten years ago, the metal accounted for less than 7% of the country’s reserves. The steady expansion reflects both the RBI’s long-term diversification strategy and the strong performance of gold in volatile global markets.
Even though fresh purchases have slowed, the rising share of gold in total reserves shows how much the RBI’s balance sheet depends on global gold prices. When bullion prices rise, India’s reserve strength appears robust; however, any future decline could have the opposite effect.
The Global Gold Rush and De-Dollarisation
Central banks worldwide have been accumulating gold as part of a de-dollarisation trend — a gradual shift away from relying too heavily on the U.S. dollar. Rising geopolitical risks, sanctions, and global monetary uncertainty have made gold a preferred asset for diversification. India, already one of the world’s largest consumers of gold, naturally fits into this trend. Culturally and economically, gold plays a crucial role in Indian society, serving as both a store of value and an inflation hedge.
Opportunities and Risks Ahead
While record gold valuations strengthen India’s external position, they also bring new challenges:
Price Sensitivity: With gold making up a large share of reserves, fluctuations in global prices can significantly affect India’s total reserve value.
Import Pressure: India remains a major importer of gold. Rising prices could increase the trade deficit or prompt policy adjustments.
Yield Trade-Off: Gold does not generate income like bonds or equities. As global interest rates shift, this could influence the attractiveness of holding large gold reserves.
India’s gold reserves crossing the $100 billion mark is both a financial and symbolic achievement. It demonstrates the power of gold as a stabilizing asset in uncertain times while underlining the importance of prudent reserve management. As global markets evolve, the RBI’s challenge will be balancing safety and liquidity — ensuring that gold remains a strategic asset, not a vulnerability.
