# India secretly airlifted gold in 1991 to avert default 2026-08-15T14:52:15+00:00 | Governance | Indian Opinion Desk Corroboration: 2 independent outlets In July 1991, India secretly airlifted 46.91 tonnes of gold from RBI vaults in Mumbai to London, pledging it to raise $405 million in emergency loans. The operation, involving the Bank of England and Bank of Japan, came as foreign exchange reserves fell to cover only weeks of imports. Times Now reports that earlier, in May 1991, 20 tonnes of confiscated gold were sold to Union Bank of Switzerland for $200-215 million. Together, these transactions bought India time to avoid a sovereign default. The crisis had roots in the 1980s: fiscal deficits, high oil imports after Iraq's invasion of Kuwait, and political instability. The Economic Times notes that India's gold played a 'reserve asset' role when international lenders lost confidence. But decades earlier, the government had tried to curb gold demand through the Gold (Control) Act of 1968. Times Now says the act imposed strict limits on bullion ownership and mandated 14-carat jewellery, which drove demand underground and fuelled smuggling, with illegal gold fetching a 40-80% premium over London prices. The Gold (Control) Repeal Act was passed on June 6, 1990, under Finance Minister Madhu Dandavate. Barely a year later, India's crisis forced the government to pledge gold again. The RBI's covert airlift became an enduring symbol of the country's economic desperation, as both sources recount. The episode underscored how regulation and crisis pushed households and the state to rely on gold as a last-resort asset. ## Coverage - timesnownews.com - economictimes.indiatimes.com This story was synthesised by AI from the 2 sources linked above. Updated: this story now draws on 2 sources. Last updated 2026-09-27T06:16:33+00:00. Tags: Gold (Control) Act, Madhu Dandavate, Mumbai, Reserve Bank of India Canonical: https://indianopinion.org/gold-controls-drove-indias-bullion-trade-underground/ License: Summary and commentary (c) Indian Opinion, reusable with attribution. Facts belong to the linked sources. Cite: https://indianopinion.org/gold-controls-drove-indias-bullion-trade-underground/#story-in-brief Review state: restored archive article, accurate at time of publication, not offered to search indexes. How this brief was made: an AI model read the reports linked above and wrote this summary and analysis, which were published automatically. Published briefs are sampled every hour by an automated quality check; the editor verifies its findings and approves corrections, and corrected briefs carry a dated correction line. Stance labels are editorial classifications of how each outlet framed this story, assigned by the same model, not ratings of the outlets. We do no original reporting. Methodology: https://indianopinion.org/ai-use-policy/