Cost of 1962 war: Stock markets fell 16%, gold price slipped 30%

Greater controls and more uncertainty marked business climate of the time

To gauge the possible cost of an escalation between India and China one need look no further than the Reserve Bank of India’s recent archival disclosures of annual reports, which has some revealing data on the impact of the 1962 war between the nations.   

The stock markets fell 16 per cent, financial institutions lent more to meet capital requirements, and gold prices plummeted 30 per cent in three weeks after the government introduced controls to conserve forex reserves. A possible balance of payments issue was also averted.

The RBI’s annual report for the year ending June 1963 said that