By TN Ashok
New Delhi,
May 13, 2026
http://youtube.com/@theflagpost
Narendra Modi told 1.4 billion people to cool it on gold. India told Modi to cool it.
In the first three months of 2026, Indians bought 151 tonnes of the stuff — so much that investment demand beat jewellery purchases for the first time ever. The World Gold Council confirmed it. Economists winced. The prime minister, the world’s most popular elected leader, discovered what every Indian PM before him already knew: you don’t come between an Indian and their gold. Not now. Not ever.
SAME TRICK, DIFFERENT DECADE: Modi’s austerity appeal wasn’t even original. Indira Gandhi pulled the same stunt decades ago when India’s economy was on life support. She asked citizens to donate gold for the national cause. Indians listened respectfully, then walked straight to the jeweller.
The 1991 crisis was more embarrassing. India was days from sovereign default. The government had to physically airlift 67 tonnes of gold out of the Reserve Bank’s vaults and pledge it to the Bank of England as emergency collateral. The state’s gold flew out of the country to keep the lights on.
Regular households? Held on to every last bangle. Modi’s appeal came from the same tired playbook — and is flopping just as hard.
THE NUMBERS ARE WILD: India burns through 700 to 900 tonnes of gold every single year. Since Modi took power in 2014, the country has imported more than 8,000 tonnes — at prices that have tripled over that same period. Between 2000 and 2014, imports crossed 10,000 tonnes. India mines virtually zero gold domestically. Every ounce is paid for in precious dollars.
Here’s the kicker: India already spends roughly $100 billion a year importing crude oil to keep its economy running. It then turns around and drops another $40 to $50 billion importing gold — which mostly ends up sitting in bank lockers doing absolutely nothing. Oil keeps the lights on. Gold just sits there, glittering smugly in a locker.
Together, these two imports are the single biggest drain on India’s foreign exchange. The difference is that one of them is non-negotiable. The other is a 5,000-year-old habit that no politician has figured out how to break.
Meanwhile, Indian households are quietly sitting on between 25,000 and 34,000 tonnes of privately held gold — worth over $3 trillion. It’s the largest private gold hoard on the planet. And it is going nowhere.
DOWN SOUTH, IT’S A RELIGION: Bad enough nationally. In southern India, it’s something else entirely.
Tamil Nadu, Kerala, Karnataka, Andhra Pradesh and Telangana consume gold at rates their population share cannot explain. A standard middle-class wedding in Kerala or Tamil Nadu involves gifting the bride anywhere from 100 to 500 grams of gold jewellery — that’s ₹10 lakh to ₹50 lakh changing hands in ornament form. Wealthy families? Over a kilogram. Easy.
Kerala got especially intense after Gulf migration took off in the 1970s. Hundreds of thousands of Malayalis went to Dubai and came back with both remittances and a serious gold-buying habit picked up from the souks. Dubai’s gold market, not coincidentally, exists largely because of Indian demand.
And whenever New Delhi hikes import duties to slow the habit, the smugglers party. Between 80 and 150 tonnes of gold enter India illegally every year during high-tariff periods. Kochi, Chennai and Mumbai airports have become low-grade theatre: gold bars stuffed in pressure cookers, hidden in shoes, sewn into underwear. The 2020 Kerala scandal, where gold was allegedly smuggled through UAE diplomatic baggage, was peak absurdity — the kind of story that writes itself.
WHY INDIA WILL NEVER BE SOUTH KOREA
In 1998, South Korea hit a wall. The government asked citizens to donate gold to help the country survive the Asian financial crisis. South Koreans actually did it. Queued up. Handed over wedding rings. Raised over $2 billion from private households. A genuine national sacrifice.
Could India ever do that?
In polite company: unlikely. Honestly: no chance. Because gold in India isn’t jewellery. For millions of women — many with no income, no property in their name, no legal safety net — gold is the only wealth they have ever truly owned. A bangle can’t be seized by a failing bank. It doesn’t require documents or lawyers or a government that works. It just exists, and it belongs to them. Strip that away for “national interest”? That’s not economic policy. That’s theft.
Modi knows it. Every PM has known it. They all make the appeal, watch it fail, and quietly move on. India’s golden millstone keeps getting heavier. And India keeps polishing it.
Sources: World Gold Council, Indian trade data, industry estimates.
