Many commentators, including this columnist, hoped that the Iran war would last only a few weeks and the disruption of supply chains would be temporary. Now that the Hormuz Strait has been closed for over 10

weeks and there is no immediate end to the energy crisis, the time has come for tightening our belts and focusing on the medium and long-term crisis management. Even if the Gulf shipping is restored immediately, it will take several months, running well into 2027, for the supplies to become normal downstream. The disruption could be prolonged for several more weeks or months. And after the current crisis, we must be prepared for similar disruptions in the future.

Right now, we are facing a mass ive current account deficit in FY27. Imports of oil and gas alone may cost about $230 billion during the current fiscal year, unless the prices ease quickly. On top of it, our inexhaustible appetite for gold is depleting vast foreign exchange reserves. In the last three fiscal years, we imported a total of 2273 MT of gold! This is roughly 25% of the total gold production of the world! We imported a record quantity of 1067 MT of gold in FY21. At current gold prices, the imports of the last 3 years would be valued at $336 billion. Gold is our second largest import after crude oil and gas.

As Paul Romer, the Nobel laureate economist, said, “A crisis is a terrible thing to waste”. We need to convert the crisis into an opportunity for the country. In this column, let me make a humble proposal regarding gold. India has the largest reserves of gold, mostly in........

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