Gold has fascinated human beings for millennia as a dependable store of wealth. A common saying captures this relationship: “Where there is wealth and geopolitical instability, gold shines.” Many Germans, having experienced severe economic dislocation after two world wars, came to regard gold as a particularly reliable safeguard for private savings; this historical experience helps explain Germany’s strong cultural preference for gold.
Although India ranks eighth in official gold reserves, with about 880 tonnes—compared with the United States’ holdings of roughly 8,133 tonnes—Indian households and temples hold an estimated 25,000 to 34,600 tonnes of gold, accounting for roughly 11%–16% of all global gold ever mined. This aggregate makes India the largest “gold vault” on Earth. However, India’s gold holdings are largely imported and are a major contributor to the country’s trade deficit. In 2024, India exported only $463 million in gold‑related products but imported $58.5 billion in gold. Gold imports increased by 24% to an all‑time high of $71.98 billion in 2025‑26, compared with $58 billion in 2024‑25. However, in volume terms, gold imports declined by 4.76% to 721.03 tonnes from 757.09 tonnes in 2024‑25. In FY26, India’s trade deficit jumped to $119.3 billion from $94.6 billion in the previous year, mainly due to a significant increase in gold price in rupee terms.
Apart from households, Hindu temples in India hold a substantial amount of gold, estimated at between 3 and 5 thousand tonnes, received as donations from their devotees. Most of these inventories remain unused and kept in hidden underground cellars for centuries. Such a hidden treasure of the Padmanabhaswamy temple of Kerala was revealed in 2011 when the Supreme Court ordered an inspection of these underground cellars. Of the six underground vaults identified at the start of the inspection, only five were opened; Vault B remained unopened due to an injunction, again by the Supreme Court. Based on the inspection of the opened underground cellars, the estimated value of gold coins and jewelry was around $22 bullion (roughly 1300 tonnes).
The Indian gold Jewelry market is highly concentrated in South India, accounting for 40% of the country’s gold jewelry demand, followed by the West (25%), North (20%), and East (15%). Similarly, Hindu temples in South India are the largest holders of gold in India.
This extraordinary attachment to gold among the majority of Indian households is less a product of social and cultural practices of people than a historically rooted strategy for protecting wealth against external predation. Over two millennia, successive waves of foreign invasions and rule often entailed the systematic extraction of precious metals and other valuables, incentivizing households to hold a substantial portion of their savings in the form of gold, which is easily concealable and transportable. Gold became the preferred vehicle for wealth accumulation not only for its intrinsic value but also for its unique physical properties: it is highly divisible, easily concealed, and provides a degree of liquidity decoupled from the stability of a central state.
Across two millennia, the Indian subcontinent experienced recurrent cycles of foreign incursions and colonial hegemony, regimes often defined by the aggressive extraction of liquid assets and bullion. In response to this persistent threat of “external predation,” households adopted a defensive financial posture. Gold became the preferred vehicle for wealth accumulation not only for its intrinsic value but also for its unique physical properties: it is divisible, easily concealed, and provides a degree of liquidity that is independent of the stability of a central state
The early Indo‑Aryan groups (c.1500-500 BCE) migrating into northwestern India had a pastoral economy in which cattle and other livestock were regarded as the principal form of movable wealth, as reflected in Rigveda. However, many indigenous (pre-Indo-Aryan, including some Dravidian-speaking and Austroasiatic) communities of the Copper Hoard and South Indian Neolithic cultures placed greater relative emphasis on metal wealth, including gold ornaments and copper hoards. However, over time, gold increasingly served across India as a durable, relatively safe asset (particularly for women and displaced groups), while cattle remained important for subsistence, status, and ritual. In this respect, the concept of Stridhana (literally “woman’s wealth”) plays an important role in creating demand for gold jewelry. Gold ornaments emerged as a sophisticated legal and moral instrument designed to mitigate systemic gender inequality. In a societal structure characterized by patrilineal inheritance and patrilocal residence, strīdhana functioned as a personal property of the woman, immune to the claims of her marital kin.
By recognizing that ornaments and other movable assets gifted to a woman at marriage remained her personal property, regardless of marital status, strīdhana functioned as an informal insurance mechanism and a hedge against widowhood‑related destitution. In this way, the valorization of gold jewelry was not merely symbolic or ornamental but became an institutionalized means of stabilizing household welfare in the face of recurrent political and military shocks. It then follows that the patriarchs of a household cannot unilaterally use a mother’s gold as strīdhana for her daughter. So the demand for gold continues, and so does the import of gold. Furthermore, two major forms of gold ownership, leaving aside the central bank’s gold reserves, that is, the gold reserves of temples and strīdhana maintained at households, do not provide much scope for a long-term policy of strictly tightening gold imports by jewelers and gold merchants through very high tariffs. The Government of India can also consider the following treatment of gold:
Gold in any form should be considered as a property, and above a reasonable threshold in terms of volume, must attract property tax.
Data:
WORLD OFFICIAL GOLD HOLDINGS
| Country | Tonnes | % of reserves** | Holdings as of |
| United States | 8,133.5 | 84.8% | Feb 2026 |
| Germany | 3,350.3 | 84.6% | Feb 2026 |
| IMF | 2,814.0 | 82.0% | Feb 2026 |
| Italy | 2,451.8 | 82.0% | Feb 2026 |
| France | 2,437.0 | 82.5% | Feb 2026 |
| Russian Federation | 2,311.0 | 48.1% | Feb 2026 |
| China, P.R.: Mainland | 2,308.5 | 10.0% | Feb 2026 |
| Switzerland | 1,039.9 | 15.6% | Feb 2026 |
| India | 880.3 | 19.8% | Feb 2026 |
International Financial Statistics, April 2026
| Gold Usage Type | Tonnes | Percentage |
| Jewelry | 97645 | 44 |
| Bars and coins (including gold backed ETFs) | 50978 | 23 |
| Central banks | 38666 | 18 |
| Other | 32602 | 15 |
| Total | 219891 | 100 |
EWN Database (External financial assets and liabilities)
| Year | 2010 | 2020 | 2024 | 2025 |
| Total Supply (Tonnes) | 4316.8 | 4740.9 | 4961.9 | 5002.3 |
| Total Mine Supply | 61.3% | 72.7% | 72.5% | 71.9% |
| Recycled Gold | 38.7% | 27.3% | 27.5% | 28.1% |
| Demand | ||||
| Jewellery Fabrication | 48.4% | 28.1% | 40.8% | 32.7% |
| Technology | 10.9% | 8.3% | 7.0% | 6.5% |
| Investment | 38.3% | 38.1% | 23.9% | 43.5% |
| Out of which Central Bank and Other Institutions | 1.8% | 5.4% | 22.0% | 17.3% |
| LBMA Gold Price (US$/oz) | 1,224.5 | 1,769.6 | 2,386.2 | 3,431.5 |