- SBI Research urges clarity on gold’s role in India’s economy
- Ghosh recommends integrating gold into financial reforms
Hyderabad, Nov 5 (Maxim News): The State Bank of India (SBI) Research has urged the government to develop a comprehensive, long-term gold policy, emphasising the need to define gold’s place in India’s economy — whether as a commodity or as money. In its latest report authored by Dr. Soumya Kanti Ghosh, Group Chief Economic Advisor at SBI, the bank underlined that India’s strong cultural affinity for gold and its significance as an investment and inflation hedge make such a policy both timely and essential.
“The time has now come to conceive a comprehensive policy on gold. It is important to define what is gold — a commodity or money — and how it is perceived by its ultimate consumer,” Ghosh wrote in the report. He noted that a clearer understanding of gold’s economic role could help India balance its long-standing tradition of gold ownership with modern investment goals.
The report compared perspectives on gold in different parts of the world. In Western economies, gold is primarily seen as public property, its value shaped by wars and financial upheavals. In contrast, Asian nations such as India, Japan, Korea, and China continue to regard gold as private property — a store of wealth and a symbol of security. This cultural difference, Ghosh observed, keeps Asian households as net buyers even as global views on gold evolve.
SBI Research suggested expanding India’s approach beyond curbing demand and recycling existing gold. It proposed focusing on monetisation efforts that could encourage productive investment and strengthen financial inclusion. The report also floated the idea of introducing gold-backed pension schemes and integrating gold into broader financial reforms, aligning these efforts with India’s long-term goal of capital account convertibility.
India remains one of the world’s largest consumers of gold. The precious metal continues to serve households as a store of value, investors as a safe haven, and central banks as a stability asset amid global uncertainty. Recent trends also show a rebound in gold prices, which climbed back above $4,000 per ounce in November after a brief dip in October. This renewed demand has boosted inflows into gold exchange-traded funds (ETFs). Between April and September of FY25, ETF inflows rose 2.7 times, followed by a 2.6 times increase in the same period of FY26, with total assets under management (AUM) reaching ₹901.36 billion by September 2025 — a 165 per cent jump year-on-year.
The report further revealed that the Pension Fund Regulatory and Development Authority (PFRDA) is exploring the possibility of allowing pension funds to invest in commodities such as gold and silver. If implemented, this could further integrate gold into India’s broader investment ecosystem and give it a structured role in long-term wealth management.
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