‘India’s unproductive saving’: Nilesh Shah on India’s rising gold imports

Managing Director of Kotak Mahindra Asset Management Company Nilesh Shah has talked about the rise in gold imports and its impact on the Indian economy in a recent tweet. Shah said that India’s gold imports continue to rise both in value and volume. The Kotak Mahindra Asset Management Company boss said that India has imported $433 billion of gold and that the country has sent foreign exchange for the same.
 
Shah further said, “Gold is India’s unproductive saving. Jewellery adds to jobs, exports and growth. Majority of gold goes into tijori/lockers in parallel economy. Despite being the largest holder of gold globally, we keep on adding year after year. Imagine what we could have developed/created, if those money hadn’t gone out.”

Meanwhile, according to Reuters data, India spent $55.7 billion on gold imports in 2021, with gold purchases going up due to the drop in prices and the wedding and festive season. India imported 1,050 tonnes of gold in 2021, far more than 430 tonnes it imported in 2020.
 
This also surpassed the previous imports record of $53.9 billion which was set in 2011. Gold is a popular wedding gift in India and is also regarded an essential part of the bride’s dowry. Whole global bullion prices drew support from strong demand in India, outlay on imports would have added to pressure on the country’s ailing rupee.

Also read: Sovereign Gold Bond Scheme 2021-22 opens: Issue price, discount, other details 

Also read: India splurges record $55.7 bn on gold imports in 2021: Report