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$700B Idle Gold Can Fuel India's Growth: Nilesh Shah's Monetisation Push

Kotak Mahindra AMC MD Nilesh Shah states that nearly $700 billion worth of gold lying idle in Indian households represents a massive pool of locked capital. He highlights that India's gold imports over 25 years exceed $500 billion, far surpassing foreign investments, with most of it stored unproductively. Shah notes a positive behavioural shift, with gold loans becoming the fastest-growing retail lending segment, reducing the traditional taboo. He calls for policy innovation and financial infrastructure to formally monetise this gold, which could significantly boost domestic investment and reduce external capital dependence.

Key Points: Nilesh Shah: Monetise India's $700B Household Gold for Growth

  • $700B gold idle in households
  • More than total FDI & FPI received
  • 1000 tonnes imported annually, bulk stays idle
  • Gold loan segment is fastest-growing retail lending
2 min read

Gold worth $700 billion lying idle can fund India's growth: Nilesh Shah calls for monetisation push

Kotak AMC's Nilesh Shah says India's $700B idle household gold can fund growth if monetised. Calls for policy push to unlock capital.

"It is lying in tijori (lockers). It has become ice. If we can monetize it... Growth will come on its own. - Nilesh Shah"

New Delhi, April 22

Gold worth nearly USD 700 billion lying idle in Indian households could be a powerful engine to fund the country's growth, Kotak Mahindra AMC Managing Director Nilesh Shah said, calling for a stronger push towards monetisation of household gold.

In an exclusive interview with ANI, Shah underscored that India's long-standing cultural preference for holding gold as a store of value has inadvertently locked up vast capital outside the formal economy.

"Collectively India has spent 700 billion dollars... for import of precious metal... It is more than the foreign direct investment we have received... It is more than the foreign portfolio investment we have received."

He pointed out that a significant portion of this gold remains unproductive. "It is lying in tijori (lockers). It has become ice. If we can monetize it, if we can bring it into the formal economy, then we'll have Triveni Sangam of talent, capital and infrastructure. Growth will come on its own."

Shah explained that India imports around 1,000 tonnes of gold annually, out of which only about 300 tonnes is exported as jewellery, leaving the bulk accumulated domestically. He also highlighted that informal inflows further add to this stock.

Over the last 25 years, India has spent hundreds of billions of dollars importing gold, much of which ends up sitting idle in households as jewellery or savings. If even a part of this gold were brought into the formal financial system and used productively, it could significantly boost economic growth.

"In 25 years... we have spent 500 billion dollars plus in import of gold... All passengers especially coming from middle east countries are loaded with jewellery... My estimate is... 700 billion dollars."

Calling India a "kasturi animal", Shah said the country possesses wealth but fails to utilise it efficiently. "India is a kasturi... it has kasturi in its navel, but it is roaming in the jungle."

On solutions, Shah noted that behavioural change is already underway, citing the rapid growth in gold-backed lending. "The fastest growing segment for retail lending is gold loan... It's no longer a taboo."

He stressed that policy innovation and financial infrastructure would be key to unlocking this capital. "We need to think about innovative solutions... If we can explain to them in the right way... then it changes."

According to Shah, mobilising idle gold could significantly reduce dependence on external capital while accelerating domestic investment-led growth, aligning with India's long-term economic ambitions.

- ANI

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Reader Comments

R
Rajesh Q
Absolutely correct! So much wealth is just sitting there. We are a sentimental people, but sentiment doesn't build roads or factories. The government should create a foolproof Gold Bond scheme with attractive interest rates. My family gold could help build a new hospital in my district. That's a better legacy.
A
Aman W
The "kasturi animal" analogy is spot on. We have the resources but lack the system to channel them. However, trust is the biggest issue. After so many banking and NBFC scams, who will hand over their life's savings? The infrastructure needs to be rock-solid first.
S
Sarah B
As someone who has lived here for 5 years, the cultural attachment to gold is fascinating. It's not just an investment; it's heirloom, it's wedding security, it's emergency fund. Any policy must respect this. Maybe start with schemes for "idle" jewellery not worn for years?
V
Vikram M
Gold loans are already booming in my town. People are realising it's better to take a loan against gold for education or business than to sell it. That's the first step towards monetisation. The capital is being used while the asset stays in the family. Win-win.
K
Karthik V
While the economic logic is sound, we must be careful. This shouldn't become a subtle push for families, especially women, to give up their financial autonomy. For many, that gold is their only independent asset. Monetisation should be a choice, not a pressure.

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