The report recommends shifting from reducing gold demand to sustainable monetisation, like gold-backed pensions, aligning with financial reforms and India’s long-term capital account convertibility goals.
NEW DELHI
The State Bank of India (SBI) Research has urged the government to create a comprehensive long-term policy on gold, emphasizing the need to clearly define gold’s role in the Indian economy—whether it is treated as a commodity or as a form of money.
In a report authored by Dr. Soumya Kanti Ghosh, Group Chief Economic Advisor at SBI, it was highlighted that India’s deep cultural attachment to gold, along with its value as an investment and a hedge against inflation, makes a forward-looking gold strategy crucial. Ghosh noted that Asian countries, including India, traditionally see gold as private property and a symbol of financial security, unlike Western nations where it is viewed more as public wealth.
The report urged policymakers to shift focus from merely reducing gold demand to creating sustainable monetisation models. These could include gold-backed pension schemes or financial instruments that help integrate gold into broader financial reforms. Aligning such efforts with India’s long-term goal of capital account convertibility would strengthen its position in global markets.
India remains one of the largest gold markets worldwide, with households and investors continuing to treat gold as a safe and trusted store of value. In 2025, gold prices surged more than 50 percent amid geopolitical tensions and a weakening US dollar.
Between April and September 2025, inflows into gold exchange-traded funds (ETFs) grew 2.7 times, while assets under management rose 165 percent to ₹901.36 billion. The Pension Fund Regulatory and Development Authority is also exploring the inclusion of gold and silver in pension portfolios, signaling its rising role in India’s economic future.