Gilty pleasure: India is where gold came to shine

What drove the desire for this metal in pre-colonial India, and what keeps it going? See how our love for gold has evolved, shaping us and our country.

India has held a glowing if strange position in the history of humans and gold.

For centuries, legends were told of how this land contained so much of the precious metal, ants dug it up as dust. When the first European traders arrived, they found, of course, that the real treasures were the spices, mainly black pepper and cinnamon.

It is easy to understand the craze that ensued, when one thinks of what ancient European cuisine must have been like

A mohur from 1862 bearing the face of Queen Victoria. (Wikimedia)

India continues to import most of its gold; native deposits are relatively low. In the financial year 2023-24, for instance, the union ministry of mines reports that India produced only about 1.5 tonnes.

But our love for the metal has led to it being collected, hoarded, traded and turned to in times of need. Gold played an integral part in the Independence movement, forming the seed capital that fuelled it, as women offered their ornaments up, to be melted, sold and otherwise used to raise funds and keep the freedom struggle going.

“Many Indian businesses and business empires have been bootstrapped by gold, which became a mandatory part of every household safe as our GDP grew,” says Ramya Ramamurthy, a business journalist who co-hosts the podcast Remembering It Differently (with HT’s Rachel Lopez).

India currently ranks eighth globally, on the list of countries with the most gold in their central bank reserves, according to the World Gold Council. (The US, Germany and Italy occupy the top spots; our nearest subcontinental neighbour on the list is Pakistan, at #33.)

A gold coin on sale today. (Tanishq)

India also ranks fourth on the list of world’s biggest gold recyclers. “Over the past five years 11% of India’s gold supply has come from ‘old gold’; driven by movements in the gold price, future gold price expectations and the wider economic outlook,” a 2022 World Gold Council report states. (China, incidentally, tops this list.)

“For Indians, gold has traditionally been the flight to safety, the inflation hedge, the asset least likely to be affected by recession and most likely to rise in value in times of trouble,” says Bazil Shaikh, former principal chief general manager with the Reserve Bank of India and author of The Conjuror’s Trick: An Interpretive History of Paper Money in India (2020).

How hardy an investment is it? In 1947, gold cost ₹88 for 10 gm. Today, 10 gm is worth a little more than ₹70,000.