Recycling Gold: India’s Opportunity to Cut Import Dependence

India is one of the world's largest consumers of gold, yet it depends heavily on imports to meet that demand — a dependence that adds to the current account deficit when gold prices rise. An emerging idea is for India to treat gold not just as something to hoard or import, but as a strategic asset to be refined, recycled and even exported.

Gold has become the world's most trusted safe-haven asset. Its price climbed from about $1,100 per ounce in late 2009 to nearly $4,900 in 2025, with a sharp surge over 2024-2025. This rise reflects a more uncertain world, where events like the pandemic, the Russia–Ukraine war, West Asian instability and the use of the dollar as a sanctions tool have pushed governments and households towards hard assets.

India's own reserves reflect this shift. Foreign exchange reserves rose to about $682 billion by end-May 2026, and within that, gold's share grew from under 6% to nearly 17% over 2015-2026, with the RBI's gold holdings rising sharply. Recycling the large stock of gold already within the country — in households and temples — could reduce the need for fresh imports.

For aspirants, this connects several economy themes: the current account deficit and the role of gold imports in it, foreign-exchange reserves and their composition, the role of gold as a reserve asset for central banks, and policy tools like gold monetisation schemes.