New Delhi

Finance Minister Nirmala Sitharaman on Monday said rising global gold prices are largely being driven by aggressive buying by central banks worldwide, adding that the government and the Reserve Bank of India are closely tracking India’s gold imports, though the situation is not a cause for immediate concern.

India’s gold imports during April–December last year rose by around USD 1 billion on an annual basis to nearly USD 50 billion in value terms. However, Sanjay Malhotra, Governor of the RBI, noted that January witnessed an unexpected jump in both the value and volume of imports, prompting a detailed analysis by the central bank.

Speaking to reporters after addressing the RBI Board, Sitharaman said gold continues to be a preferred investment for Indian households, whether as jewellery or as a financial asset, making India a net importer of the precious metal. “We are monitoring the trend, but it has not reached an alarming level, considering the traditional inclination in India towards gold. The RBI is also keeping a watch,” she said.

The finance minister pointed out that domestic demand for gold usually rises during the festive season, including occasions such as Akshaya Tritiya. She also highlighted that central banks across the world are currently increasing their gold and silver reserves.

Malhotra said that between April and December 2025, the impact of higher prices was broadly offset by a reduction in import volumes. “It is only in January that we have seen a sharp rise in both value and volume. There is considerable volatility and seasonality in gold demand, and we are examining the data,” he said.

The RBI Governor added that the central bank is “not unduly worried” as India’s external sector remains strong. “The current account deficit is projected to be well within manageable limits, around 1 per cent of GDP,” he said.

Earlier in the day, Sitharaman addressed the 621st meeting of the Central Board of Directors of the RBI, chaired by Malhotra. The Board reviewed global and domestic economic conditions, taking into account challenges arising from geopolitical tensions and financial market volatility.

After the meeting, Sitharaman interacted with Board members and outlined the strategic vision of the Union Budget 2026-27, which she said is guided by the three Kartavyas and aimed at advancing the goal of Viksit Bharat. The Board members welcomed the Budget and shared their views.

The finance minister was accompanied by Minister of State for Finance Pankaj Chaudhary, DIPAM Secretary Arunish Chawla, Expenditure Secretary V Vualnam, Revenue Secretary Arvind Shrivastava, and Chief Economic Adviser V Anantha Nageswaran.

RBI Deputy Governors T Rabi Sankar, Swaminathan J., Poonam Gupta and Shirish Chandra Murmu were also present, along with Financial Services Secretary Nagaraju Maddirala and Economic Affairs Secretary Anuradha Thakur.

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Other directors attending the meeting included Satish K. Marathe, S Gurumurthy, Revathy Iyer, Sachin Chaturvedi, Venu Srinivasan, Pankaj Ramanbhai Patel and Ravindra H. Dholakia.