India’s ₹8.6 Lakh Crore Gold Puzzle: Why Is Uday Kotak Warning About The Country’s Favourite Metal?

Veteran banker Uday Kotak has cautioned that India's total gold import expenses may reach around Rs 8.4-8.6 lakh crore in the fiscal year 2027, putting strain on the nation's external finances as oil prices rise and the rupee weakens. Addressing the Financing India's Journey Towards Viksit Bharat conference, Kotak called for practical solutions to address India's gold imports.

The event featured Finance Minister Nirmala Sitharaman and state and Union Territory finance ministers. Kotak pointed out that India had a current account deficit of nearly Rs 2.4 lakh crore in FY26, but if gold purchases were excluded, it would have had a surplus. He estimated that the deficit could increase to around Rs 5.75 lakh crore for FY27 if crude oil averaged Rs 8,600 per barrel, and gold imports rose to Rs 8.6 lakh crore.

Kotak urged forming a committee to explore solutions while balancing household gold preferences and tackling India's capital and current account issues. He advocated for stronger fiscal discipline, productive markets, and tighter fiscal management. Kotak cautioned against excessive financialization, emphasizing that capital markets should primarily support capital formation rather than be dominated by trading volumes and short-term price fluctuations.

He urged India to turn global economic uncertainty into an opportunity by accelerating reforms and investments, increasing domestic production, and reducing reliance on critical imports. Kotak also called for balanced financial regulation, accountability for individual wrongdoing, and stronger coordination between the Center and states to help India withstand mounting global trade, geopolitical, and financial pressures.