Gold's role in India's economy is undergoing a fundamental transformation. As global uncertainty rises amid geopolitical tensions and supply chain disruptions, gold now serves dual purposes: a safe-haven asset for investors and a store of value for households. With over 85 percent of Indian households owning gold, the precious metal is deeply embedded in the nation's financial system. Rather than viewing gold imports as merely a macroeconomic problem widening the current account deficit, policymakers should recognize gold's potential for mobilizing private holdings toward productive economic purposes. India's unique exposure to global commodity shocks, combined with its massive private gold reserves, presents both challenges and opportunities.
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