Why Is China Importing So Much Gold? India Also Increasing Reserves Amid Global Surge

Last Updated:October 08, 2025, 17:55 is

The Reserve Bank of India (RBI) steadily expanded its gold reserves, which now total 880 tonnes as of October 8, 2025

India’s gold reserves total 880 tonnes as of October 2025.

Gold, long considered a haven in times of uncertainty, is witnessing an unprecedented surge in demand, driven not just by individual investors but by central banks across the globe. The precious metal, which traded below Rs 70,000 per tola (approx. 11.66 g) in 2023-24, has now surpassed Rs 1.25 lakh in 2025, reflecting a combination of global economic tensions, inflationary pressures, and strategic monetary policies.

At the forefront of this accumulation is China. The People’s Bank of China has continued its aggressive gold purchases in 2025, acquiring approximately 39.2 tonnes between January and September alone. As of October 8, 2025, China’s total gold reserves stand at 2,298.5 tonnes. On average, the country has been adding between 2 and 5 tonnes monthly, although September saw a temporary slowdown, with only 0.4 tonnes acquired.

Experts suggest several strategic reasons behind China’s sustained gold purchases. Foremost is the effort to reduce reliance on the US dollar. While China holds substantial dollar reserves, policymakers are keen to diversify their assets away from a currency tied solely to the US economy. Gold, by contrast, is globally recognised as a neutral and stable store of value.

Rising geopolitical uncertainties also play a critical role. The fallout from the Russia-Ukraine war has prompted nations to secure assets that are less vulnerable to international sanctions or political pressures. “Gold acts as a shield in times of global instability,” said a senior analyst familiar with the matter.

Inflationary concerns further underscore the appeal of the yellow metal. With prices touching around $3,900 per ounce in 2025, gold preserves purchasing power even as fiat currencies fluctuate, making it an attractive instrument for long-term economic security. In addition, bolstering gold reserves is seen as a way for China to strengthen the global standing of its currency.

China’s accumulation is part of a broader trend among major economies. The Reserve Bank of India along with central banks in Russia and Turkey have ramped up purchases in recent years.

Since 2022, global central banks have collectively acquired over 1,000 tonnes of gold annually, citing reasons that mirror China’s strategy: distancing from the dollar, mitigating geopolitical risk, shielding against inflation, and building long-term economic resilience.

India, too, has followed suit. The Reserve Bank of India (RBI) steadily expanded its gold reserves, which now total 880 tonnes as of October 8, 2025. Of this, approximately 512 tonnes are stored domestically in Nagpur and Mumbai, with the remainder held in overseas institutions such as the Bank of England and the Bank for International Settlements. Gold accounts for 11.7 percent of India’s total foreign exchange reserves.

Over the past decade, India’s gold holdings have increased by nearly 58 percent, rising from 557.7 tonnes in 2015 to 880 tonnes in 2025. The pace of accumulation has accelerated particularly since 2022, signalling India’s intent to align with global trends in strengthening economic security through strategic gold reserves.

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