A path to progress that is paved with gold
Atmanirbharta has been central to India’s story, not just as an economic plan but also as a philosophy of existence. For us, self-reliance has always meant drawing strength from within so that we may stand taller in the world. Under Prime Minister Narendra Modi, India has embraced Atmanirbharta with renewed vigour, transforming ambitious ideas into tangible national achievements across sectors. His governance has propelled India’s self-reliance journey, demonstrating unparalleled resilience and innovation even amid global uncertainties.
This instinct has defined India’s journey: when droughts struck in the 1960s, the Green Revolution made India food secure; in the 1990s, foresight in the digital sphere turned talent into national strength; during the COVID-19 pandemic, India developed its own indigenous vaccines rapidly, showcasing scientific and manufacturing self-reliance; today, it is advancing towards self-reliance in defence systems. The lesson remains consistent: whenever India has chosen self-reliance, crisis has been turned into capability.
That principle now needs its strongest expression in financing India’s growth. India has drawn over $1 trillion in gross FDI since 2000, yet global realities are shifting. Global investment flows have shrunk by more than 11% in calendar year 2024 while international project finance deals fell by 27%. Foreign portfolio investments, while substantial, remain volatile, swayed by global tremors. As the world retreats from globalisation and the costs of capital rise abroad, India cannot afford to hinge its future on external flows. The time has come to unlock Bharat’s own wealth to fuel Bharat’s own growth.
A stock of immense value
The most compelling starting point is gold. For generations, gold has been both a store of value and a symbol of security in Indian households. Over time, this trust has expanded to an extraordinary scale: families in India today collectively hold close to 25,000 tonnes of gold, making this the single largest private reserve in the world. At today’s prices, this translates to about $2.4 trillion of wealth, or more than 55% of India’s GDP in FY26 terms — a stock of value even larger than all the credit extended by India’s banks.
Paradoxically, despite such reserves, India remains one of the largest importers of gold, meeting roughly 87% of demand from abroad, with imports accounting for 8% of its total bill. Between 2010 and 2013, gold imports made up almost a third of India’s trade deficit. This paradox highlights both an enormous challenge and an unprecedented opportunity.
Because India’s relationship with gold is cultural and civilisational, coercive restrictions are not the answer. What is needed instead is a revitalised, trust-based gold monetisation scheme. Unlike past experiments that faltered due to weak infrastructure and limited outreach, a reimagined scheme must build on global best practices. A striking example comes from a few nations that successfully invested in assaying facilities, created innovative gold savings products, and digitised gold flows through mobile apps, managing to bring thousands of tonnes of “under-the-pillow” gold into their formal financial system. India can adapt these lessons.
The basics
The road ahead demands three essentials. First, infrastructure — hallmarking and purity testing centres need to scale faster for trusted valuation across the country. India requires a formal network of collection and purity testing centres. Only recently has it begun expanding the reach of standardised testing: the number of Bureau of Indian Standards-registered assaying and hallmarking centres has almost doubled in the last four years. Yet, a large share of the market still consists of unbranded gold with uncertain purity, which prevents the efficient recycling of gold into the economy. Second, logistics — banks can manage the money flows, while experienced collection and purity testing centres handle gold movement securely and transparently. Third, digitalisation — every household depositor should be able to track their “metal balance” as easily as a bank account balance. But, above all, trust is the foundation. To build it, we must remove frictions such as goods and services tax and customs scrutiny on deposits, and ensure a simple, “no questions asked” environment where returns flow back directly to depositors without hidden costs.
If structured this way, the economics are favourable. The cost of funds raised through gold monetisation could fall in the range of 4.5%-6.5%, lower than the effective cost of borrowing from international markets. Even if a fraction of India’s household is mobilised, the impact would be transformative — easing import pressure, strengthening the current account and creating a vast pool of domestic capital to drive infrastructure, manufacturing and innovation.
Moment of financial self-reliance
History shows that India has always risen to moments of crisis, transforming them into capability. Just as it attained food security during the Green Revolution and global leadership in IT services during the digital age, its now stands before the call for financial self-reliance. Mobilising domestic wealth, particularly through gold, is not just an economic choice. It is a civilisational one.
This is about building the confidence that Bharat can fund Bharat, harnessing its own wealth, ingenuity, and resilience. The path forward demands trust, foresight and determination. But the prize is unmistakable — an India that defines its growth on its own terms, self-reliant in spirit and substance, and financing its aspirations from within to step boldly into the future.
Gourav Vallabh is a Part-Time Member of the Economic Advisory Council to the Prime Minister (EAC-PM) and Professor of Finance. The views expressed are personal
Published – October 08, 2025 12:08 am IST
