Mumbai: Uday Kotak, founder and managing director of Kotak Mahindra Bank, has issued a stark warning about the trajectory of India's gold import bill, projecting it could climb to between USD 88 billion and USD 90 billion by the end of FY27. The projection comes amid rising domestic demand for the precious metal and increasing trade deficit pressures.
Speaking at a recent economic forum, Kotak stressed that the sheer scale of gold imports is no longer just a trade concern but a macroeconomic challenge that demands coordinated policy intervention. He called for the formation of a high-level policy committee tasked with studying the dynamics of gold imports and recommending structural measures to curb the runaway expenditure without dampening consumer sentiment.
Gold has long been a cultural staple in India, deeply embedded in weddings, festivals, and religious practices. However, the financial implications of such deep-rooted demand have grown increasingly significant. With India importing the vast majority of its gold domestically, the outflow of foreign exchange has come under close scrutiny by economists and policymakers alike.
Kotak also highlighted the urgency of broader fiscal consolidation efforts. He noted that despite improvements in recent years, India still needs to strengthen its fiscal position, particularly as global economic uncertainty continues to mount. Governments worldwide are navigating inflationary pressures, shifting interest rate regimes, and geopolitical turbulence, all of which make disciplined fiscal management more critical than ever.
The banker suggested that rather than viewing global headwinds as purely negative, India should leverage them as a catalyst for accelerated structural reforms. He pointed to opportunities in attracting foreign investment, modernizing supply chains, and boosting domestic manufacturing — particularly in sectors that could reduce reliance on imported goods including gold.
Kotak's remarks reflect growing concern among financial leaders about the sustainability of India's current account dynamics if gold imports continue on their present path. While the government has introduced measures such as the Sovereign Gold Bond scheme and incentives for domestic refining, critics argue these steps remain insufficient to offset the scale of import dependence.
The call for a dedicated policy committee signals a shift in tone — from treating gold imports as a peripheral trade issue to recognizing it as a central economic priority requiring multi-stakeholder coordination.
