On Monday, a member of Prime Minister Narendra Modi’s economic advisory team contended that India could have achieved the Prime Minister’s $5 trillion GDP target “long before” if not for the enduring practice of importing gold. Nilesh Shah, an industry veteran in mutual funds and a part-time member of the Economic Advisory Council to the PM (EACPM), highlighted that over the past 21 years, Indians have expended approximately $500 billion exclusively on gold imports.
While expressing the nation’s commitment to reaching the $5 trillion GDP target, Shah stressed that by restraining the singular habit of gold imports, India could have realized the economic milestone much earlier. He underscored that the country might have forfeited a significant portion of its GDP—potentially one-third—by not making prudent financial investments. Shah, who serves as the Managing Director and Chief Executive of Kotak Asset Management Company, articulated these views during an economic discussion.
Drawing on official data, Shah disclosed that Indians have invested $375 billion in net gold imports over the last 21 years. He also highlighted the prevalence of smuggling, as evident from frequent Customs’ gold seizures. Furthermore, Shah brought attention to individuals returning with gold jewelry from destinations like Dubai and effortlessly passing through the Green Channel at the port of landing.
Shah proposed an alternative scenario, suggesting that if the funds spent on gold imports had been directed towards investments in Indian business giants such as the Tatas, Ambanis, Birlas, Wadia, and Adani, the impact on the nation’s GDP, growth, and per capita GDP would have been substantial. This perspective underscores the economic ramifications of diverting funds from gold imports to strategic investments in the country’s entrepreneurs and businesses.