For generations, Indian policymakers have viewed gold imports as a chronic vulnerability—a drain on foreign exchange and a primitive savings habit.
What appeared to be a liability may, in fact, represent the largest single act of household wealth creation in independent India’s history.
Between 2011 and 2025, India imported approximately 12,670 tonnes of gold at a cumulative cost of roughly $609 billion. At the current spot price of $4,677 per ounce (as of 4 April 2026), that gold is now worth approximately $1.905 trillion.
The $1.3 trillion appreciation alone exceeds India’s entire stock of foreign exchange reserves. No other asset class, government scheme, or financial product has generated comparable wealth for Indian households over this period.
Data shows there is not a single year between 2011 and 2025 in which holdings have not at least doubled in value.
Consider a few examples:
- Gold imported in 2015 for $35 billion is now worth $157 billion—a 350% gain.
- Gold bought in 2018 at $32 billion has more than quadrupled to $142 billion.
- Even the pandemic year of 2020, when India imported just 430 tonnes at $22 billion, has returned $65 billion at today’s prices.
Household balance sheet
Estimates from the World Gold Council suggest Indian households hold between 25,000 and 34,600 tonnes of gold.
At today’s prices, that equates to a holding worth between $3.8 trillion and $5.2 trillion—roughly equivalent to India’s entire GDP.
This is not “dead capital.” For millions, particularly in rural India, gold functions as collateral, inheritance and emergency reserve—simultaneously. No bank deposit has yet replicated this combination of liquidity, portability and trust for the communities that rely on it most.
2025 breakout, 2026 consolidation
Gold’s performance in 2025 was exceptional. The metal recorded 53 all-time highs and delivered a 67% annual return in US dollar terms.
For Indian investors, rupee depreciation amplified gains, pushing domestic returns to 73%. Gold emerged as the top-performing asset class by a wide margin.
In 2026, gold is consolidating. After 53 all-time highs in a single year, a pause near $4,677 is not a reversal—it is the market digesting a generational repricing.
The structural drivers that carried gold to $5,594 in January remain intact: widening fiscal deficits, continued central bank buying, and pressure on real yields.
Historically, consolidations following breakout years have marked attractive entry points for long-term investors. The current setup appears no different.
Allocation discipline
Despite gold’s historic performance, most planners recommend a 5% to 10% portfolio allocation.
The ceiling reflects portfolio construction discipline rather than scepticism about gold’s merits. Unlike equities or debt, gold generates no cash flow. A larger weight shifts portfolios toward a non-income-producing asset.
A 5% to 10% allocation captures gold’s role as a volatility dampener and crisis hedge, while preserving exposure to income-generating assets that compound over time.
Locker risk
The real question is not whether to own gold—but how to own it efficiently.
Bank locker holdings carry poorly understood risks. RBI regulations cap a bank’s liability for locker contents at 100 times the annual rent. For a ₹5,000-per-year locker, maximum liability is ₹5 lakh.
Yet a modest 100 grams of gold—roughly the weight of a single ancestral bridal jewellery set—is worth approximately ₹15 lakh today.
This creates a structural protection gap for locker holders. Insurance can theoretically bridge it, but penetration remains low, and annual premiums of 0.5% to 1% meaningfully erode returns.
GIFT City route
Until recently, Indian investors had limited access to internationally domiciled, hard-currency gold vehicles.
Regulatory changes by International Financial Services Centres Authority (IFSCA) have now opened avenues for NRIs and resident Indians to access professionally managed, physically backed gold funds in GIFT City.
For investors seeking gold exposure without the friction of physical ownership—and who prefer returns measured in hard currency—this is a significant development.
Such structures allow investors to access gold stored in IIDI-insured, IFSCA-regulated vaults within GIFT City, independent of Western custodian networks.
Gold has always been India’s most widely held asset.
Data now suggests it is also among its most rewarding.
The inherited wisdom of generations has, at least over this period, proven more resilient than the economic models that dismissed it.
Sachin Sawrikar, managing partner, Artha Bharat Investment Managers IFSC LLP