India’s centuries-old love affair with gold is once again under the spotlight, but this time, the conversation is shifting from buying more gold to making existing holdings work harder.
Earlier this month, Prime Minister Narendra Modi urged citizens to voluntarily pause gold purchases for a year, a move aimed at easing pressure on India’s import bill and strengthening macroeconomic stability. Soon after, the government raised import duties on gold from 6 per cent to 15 per cent, reinforcing its intent to curb imports of the precious metal.
India remains the world’s second-largest consumer of gold after China, importing nearly 600-800 tonnes annually, according to Bloomberg estimates. While gold continues to hold deep cultural and emotional significance in Indian households, financial experts now believe investors should reassess how they own and use the yellow metal.
From emotional asset to productive wealth
Priti Rathi Gupta, Founder of Lxme, told ETMarkets, a significant portion of household gold remains locked away and underutilised, even as investors seek higher returns and long-term wealth creation.
“Indian women have always understood the emotional and financial value of gold, but the conversation today is evolving from simply owning gold to optimising it,” Gupta said.
“A large part of household gold still sits idle in lockers, while women simultaneously struggle to build diversified, inflation-beating portfolios,” she added.
Gupta believes investors should evaluate whether a part of their dormant gold holdings can be monetised or shifted into more efficient financial products.
“There is a strong case for women to evaluate whether a portion of this ‘dead asset’ can be made productive, either by selling underutilised jewellery, monetising dormant holdings, or even shifting from physical gold into smarter and more efficient forms like digital gold, Gold ETFs, or Sovereign Gold Bonds,” she said.
The idea, according to her, is not to disconnect emotionally from gold, but to ensure that wealth generates better outcomes.
“The objective is not to disconnect from gold emotionally, but to ensure wealth is working harder and more transparently,” Gupta added.
Gold rally may be an opportunity for profit booking
With gold prices having witnessed a sharp rally over the last few years, wealth advisors also believe investors should consider partial profit-booking rather than continuously accumulating more gold.
In an interview with ETNow earlier in May, Feroze Azeez, Joint CEO at Anand Rathi Wealth, argued that Indian households collectively hold enough gold to significantly reduce the country’s dependence on imports if even a small portion is monetised.
“Like last year, FIIs exited about Rs 1.68 lakh crore, which was the worst year of outflow. If all of us sell 2-3-4 per cent of our gold in the name of profit booking — people say equity mein profit booking karni chahiye, gold mein bhi rally hui hai, toh profit book karo,” Azeez said.
According to him, reducing gold imports could have a meaningful impact on India’s external balances.
“We can offset the entire FII outflow if you could bring gold imports down to zero. And it is not very difficult,” he said.
Are there better alternatives to gold?
Experts also point out that while gold remains a good hedge during uncertain times, its long-term return profile may not always outperform other financial assets.
“The rolling return of gold is just about 8.5 per cent in rupee terms on a 10-year basis, and there are several assets which can deliver that,” Azeez said.
He highlighted that even conservative savings instruments have historically delivered comparable post-tax returns.
“Even a Sukanya Samriddhi Yojana would have delivered 8.25 per cent post-tax for all the young girls in India,” he added.
Gupta echoed similar views, saying younger investors — especially women — are increasingly prioritising liquidity, flexibility, and long-term wealth creation over traditional accumulation.
“For younger women investors especially, we are seeing a clear mindset shift. They value liquidity, flexibility, growth, and financial independence as much as tradition,” she said.
She believes the future of wealth creation lies in diversification rather than excessive concentration in one asset class.
“Gold will always remain culturally significant, but modern wealth creation requires diversification beyond a single asset class,” Gupta noted.
The shift from sentimental saving to strategic investing
Financial planners believe the debate around gold is no longer about whether Indians should own gold, but about how much they should own and in what form.
Instead of continuously adding physical gold, experts suggest investors consider a more balanced approach by combining gold exposure with equities, SIPs, mutual funds, retirement products, and other long-term investment avenues.
“The future of wealth planning for women lies in moving from ‘saving sentimentally’ to ‘investing strategically’, where every asset, including gold, contributes meaningfully towards long-term financial security and freedom,” Gupta said.
As India attempts to manage its import bill and channel household savings into productive financial assets, the country’s vast stockpile of idle gold may increasingly become part of a broader economic and investment conversation.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times.)
