India's gold import challenge demands innovation beyond tariffs. The Reserve Bank of India could tokenize gold deposits into digital assets tradeable on the e-rupee platform, unlocking idle capital while reducing forex pressure. Gold imports hit $72 billion in fiscal 2025-26, making it India's second largest import after crude oil. Previous monetization schemes and sovereign gold bonds showed limited success due to structural constraints. Tokenized gold offers a modern solution that could incentivize households to convert physical hoards into productive financial assets without the retrieval issues that plagued earlier programs. This approach addresses both the balance of payments burden and the need to mobilize India's substantial household gold wealth for economic growth.
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