Mutual fund industry veteran Nilesh Shah, a part-time member of the Economic Advisory Council to the PM (EACPM), has voiced his concerns about India’s habit of importing gold. According to Mr. Shah, in the last 21 years, Indians have spent around $500 billion on gold imports alone, which has hindered the country’s progress towards achieving Prime Minister Narendra Modi’s $5 trillion GDP target.
Mr. Shah emphasized that if Indians had not been importing gold so heavily, we would have become a $5 trillion economy much earlier. He cited official data that showed Indians have spent $375 billion on gold imports on a net basis in the last 21 years. Furthermore, he highlighted the rampant smuggling of gold and evidenced it by Customs’ gold seizures on a regular basis.
Moreover, Mr. Shah noted that people often bring back gold jewellery from destinations like Dubai and successfully clear customs without declaring their purchases. He believes that if the money traditionally invested in gold had been invested in Indian entrepreneurs like the Tatas, Ambanis, Birlas, Wadia, and Adani, the country’s GDP growth rate and per capita GDP could have been significantly higher.