The rupee has been under relentless pressure of late, and one of the factors contributing to the same is imports. Within imports, oil is the major component, which has been a challenge for the government as the price has been above $100/barrel with the closing of the Strait of Hormuz. The issue of gold imports has come to the discussion table again, with a call being made to lower the demand. Is this possible? And if so, what are the options?

The data on gold imports is interesting. They have peaked at $72.4 bn in FY26. Ten years back, they were at $31.7 bn, which means that they have more than doubled. However, when one looks at the quantity imported, the picture is very different. Imports in FY16 were at 968 tonnes, which was overtaken in FY19 at 982 tonnes. Subsequently, the trend has been downwards. It came down to 651 tonnes in FY21, which had one month of Covid-19. It increased to 879 tonnes in FY22, as gold became a safe haven for investors, and has trended downwards subsequently. It was at 795 tonnes in FY24, 757 tonnes in FY25, and 721 tonnes in FY26.

This has some interesting implications. The first is that imports have come down for sure in physical terms. However, with the price of gold rising sharply due to the tariff crisis followed by war, the imported value has gone up.

Second, the demand comes mainly from individuals, who invest in gold as a saving habit, and........

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