Gold: India's Emotional Asset, Now a Forex Management Priority by Amit Gupta, Kedia Advisory
PM Modi Ji’s appeal to conserve foreign reserves is an urgent policy signal for India’s external economy, as pressure has built up sharply within a short period. Energy cost has surged nearly 98% in 2026, while the rupee has depreciated around 15% from 83.76 to above 96.3. India imports crude oil, edible oil, fertilisers, electronics and gold; therefore, every dollar outflow matters when energy inflation and currency weakness move together.
Gold becomes crucial because India imports nearly 700–800 tonnes annually, making it one of the world’s largest gold-consuming nations. Investment demand has also risen sharply, with family offices, mutual funds and AIFs increasingly treating gold as a serious financial asset. Import duty was cut to 6% earlier, but has now been restored to 15%, which may moderate fresh imports.
However, we must understand India’s DNA: we do not merely buy gold, we consume gold through emotion, culture and rituals. India holds nearly 20,000 tonnes in households and 3,000–4,000 tonnes in temples. The government is rightly creating awareness around gold monetisation schemes so that idle gold stock can enter the formal system and be used as productive working capital. This can reduce fresh imports, save forex, support jewellers and strengthen India’s external stability.
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