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India’s fascination with gold is well known. Be it weddings or Mundans, or festivals like Diwali, Dhanteras and Akshay Tritiya, gold is bought heavily. Gold may be a symbol of prosperity for you, but your fascination with gold is becoming a hindrance to the Indian economy. Due to the huge demand for gold, India is among the largest importers of gold. The trade deficit is holding us back from becoming a five trillion dollar economy.
Gold import has almost doubled in this October itself. Gold worth $7.2 billion was bought into the country from abroad during the festive month, while gold imports worth $4.1 billion were imported in September 2023, a month earlier. This is an increase of 95.4 percent.
A 5 trillion dollar economy would have been ‘a long time ago’
Prime Minister’s Economic Advisory Council (PM-EAC) interim member Nilesh Shah on Monday said that if India was not in the habit of importing gold, India would have achieved the $5 trillion GDP target “much earlier”.
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Shah, a veteran of the mutual fund industry, said Indians have spent nearly $500 billion on gold imports alone in the last 21 years. He said that we are working towards achieving the Prime Minister’s Gross Domestic Product (GDP) target of $5,000 billion, but we could have become a $5,000 billion economy much earlier with just one habit away. We have probably lost one third of India’s GDP by not making proper financial investments.
375 billion dollars spent on gold imports
Quoting official data, Shah, managing director and chief executive officer of Kotak Asset Management Company, said Indians spent $375 billion on gold imports on a net basis in the last 21 years. Along with this, the news of gold smuggling also comes regularly.
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