Though the Modi government has claimed reports on RBI selling $12 billion in gold as fake, many international agencies including Bloomberg have not denied the plausibility of such a move. The logic behind their argument is based on GOI’s ongoing practice of boosting the country’s foreign-currency assets including dollar amid pressure from the Iran-US conflict, rising oil prices, and a weakening rupee. Of course, the Modi government has not accepted any of these arguments.
However, from a geo-political and geo-economic perspective, especially in the context of the Modi government’s firm opposition to the ongoing De-dollarisation move initiated by China-led BRICS (except India), this much discussed but unconfirmed “gold-sale” by India is perfectly in tune with its current stature as a faithful junior partner of US imperialism. Paradoxically, the reports on huge “gold-sale” by India also come at a specific context when all the founding members of BRICS (except India) such as China, Russia, Brazil, and South Africa are aggressively accumulating gold to reduce reliance on the US dollar and shield their Central Bank reserves from Western, especially US, sanctions. For instance, when the Ukraine war began in 2022, the US and EU had frozen Russia’s 300 billion dollar reserves held in Western banks. The case of Iran is another example. That’s, US-led imperialism is regularly weaponising the dollar reserves against countries whenever an opportunity comes. This option is not there if countries store their reserves as gold in domestic vaults.
Together with this, the immediate reason for gold accumulation by BRICS and even by the EU , as noted above, is the intensified trend towards De-dollarisation. While moving away from dependence on the dollar (and on US), for international settlements, gold acts as a generally acceptable reserve asset that can also stabilise new multi-currency and digital payment frameworks. Therefore, in essence, today BRICS (and even EU) members are accumulating gold as part of the De-dollarisation strategy and as an anti-dollar measure.
On the other hand, the gold accumulation that takes place in India has been purely consumer-driven. A close analysis will reveal that the Indian regime which is always clinging on to the apron strings of the US imperialist-master, has so far not displayed any intention to accumulate gold for protecting the country’s finances from American interference. On the other hand, today, the BRICS (except India) members are accumulating huge gold stocks in view of the impending De-dollarisation and for freeing themselves from the clutches of the dollar.
Therefore, the doubt raised by many agencies and experts regarding India’s sale of huge gold-stock has an inherent logic. India’s foreign exchange reserves are predominantly denominated and invested in the US Dollar, US Treasury Bonds, Foreign Central Banks and with the Bank for International Settlements. Viewed in this perspective, the doubts raised by many sources on India’s recent “gold-sale”, though outrightly rejected by the Government, still have a valid logic.
P J James
