India has a different approach to gold. For families, it is a store of wealth. A hedge against uncertainty. The yellow metal has become a symbolic asset passed down through generations. On the other hand, it is a macroeconomic headache for policymakers. The reason is that almost all of the gold that Indians buy has to be imported. There is $5 trillion of gold lying dormant at home. India imports gold every year at a cost of billions of dollars. The gold gets stashed away in the households’ savings. The following year, a huge amount of gold is imported. Indians buy it again and keep it at home. Once again, the gold gets stashed away in the savings of those households. India builds up mountains of gold. It sits idle in the households’ savings. On the other hand, billions of dollars are spent on gold imports.
Amid this, a big concern has emerged in front of the country. Dollars are running out. There is pressure on foreign exchange reserves. In such a situation, the central government has called for reducing gold imports. It has been advised to stay away from buying gold for a year. This will save the country a large amount of foreign exchange. Under the strategy, the central government is planning to bring an advanced gold monetization scheme. It is known from government sources that this can be announced in the next two weeks. According to the source, more than 1,000 tons of gold can be brought back into the system through this step. According to the proposed structure, jewelers across the country will be included in this scheme as ‘collection partners’. They will help bring the gold stored at home into the system. Gold imports have been increasing for a few months. That is, more dollars are leaving India. This is putting pressure on the currency. Gold prices are also increasing.
For this, the government is now trying to bring jewellers into the process and relaunch the gold monetisation scheme. According to media sources, the government is going to make jewellers part of the new version of the gold monetisation scheme, which will bring some of the gold lying in Indian homes into the system. According to the World Gold Council, there is about 25,000 tonnes of gold in Indian homes and temples. According to another estimate, it is 30,000 tonnes. According to some surveys, the amount of gold kept in homes and temples can go up to 50,000 tonnes. Gold prices have increased rapidly in the last two years. Kotak Institutional Equities estimates that the amount of gold kept in homes will exceed $ 5 trillion by January 2026. This is about 125% of India’s GDP.
