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Veteran banker and Kotak Mahindra Bank founder Uday Kotak called for a fresh policy approach to India’s rising gold imports. It warned that the country’s gross gold import bill could reachUSD 88-90 billion in FY27.
Speaking at the Conference on Financing India’s Journey Towards Viksit Bharat in New Delhi, Kotak said, “India needs to find a way to balance household demand for gold with the impact of imports on the country’s external finances. He suggested that the government could consider setting up a committee to examine the issue.”
Kotak expects the current account deficit to rise to aroundUSD 60 billion in FY27 if crude oil prices average aboutUSD 90 a barrel. Against this backdrop, he sees gold imports rising to as much asUSD 90 billion.
His comments come as geopolitical tensions have pushed up energy prices and added pressure to India’s import bill. Reuters reported that India’s crude oil imports rose 25.8% year-on-year to USD 16.69 billion in August, while the country’s crude basket averagedUSD 90.19 a barrel that month.
At the same time, gold imports fell sharply in August to USD 2.3 billion. The World Gold Council said imports dropped 58% year-on-year, although it expects festive and wedding-related demand to support the market in the coming months.
Kotak said Indian households hold substantial wealth in gold, but much of that wealth remains outside productive economic activity. He argued that any policy response should account for people’s demand for gold while addressing the pressure on the capital and current accounts.
He also called for tighter fiscal consolidation, noting that India’s consolidated fiscal deficit remains above 7%. Experts suggest that the government needs to maintain fiscal discipline while supporting economic growth.
Kotak’s comments put the focus on a long-standing policy challenge: how India can accommodate strong household demand for gold without allowing rising import values to add significantly to external-sector pressures.
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