For India and Indians, gold has mythological, historical, economic, social and cultural significance. There are references to gold in the ancient Indian scriptures and literature. Gold’s economic significance as a store of value, the financial security it offers, and its easy fungibility or exchangeability with cash are traits well recognised. We have been the world’s second-largest importer and consumer of gold for many years.

Out of the world trade of about 3,200 tons, our annual imports are an estimated 700-900 tons valued at $35-40 billion. Yet, India is hardly the price-setter in the world bullion market, but only a price-taker. Gold prices are determined largely in London and New York markets, and we follow those price trends. Policymakers and experts alike have been talking about making India a price-setter in the global gold market rather than continue as a price-taker. Of course, it is evocative and feels good to talk about it, but in practice, we have done nothing to move ahead.

While a large import volume alone cannot give us much clout globally, this grand vision of becoming a price-setter is achievable if we surmount a few challenges the country’s bullion ecosystem faces. It demands political will and commitment from all stakeholders. Enhancing our price clout in the world market requires several forward-looking initiatives. Large production or consumption alone will not allow a country to become a price-setter.........

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