Tons of gold.

"Reserve Bank of India (RBI) Governor Sanjay Malhotra has indicated that capital account liberalisation cannot come at the cost of macroeconomic sovereignty." "Highlighting some of the prudent measures.., Malhotra said that there were controls on the capital account for residents, limits on short term foreign debt and RBI intervened in forex markets when needed." TOI. Deputy Governor T Rabi Sankar said, "The RBI remains committed to the internationalisation of the rupee, but steps in with measures whenever there is excessive volatility." msn.com. The Indian rupee is freely convertible in the current account, which is for investment purposes (Medium) but is not convertible in the capital account, which is for buying assets (Tata). "Foreign investors (FIIs) pulled out nearly $19 billion from Indian equities in 2026 so far, even as domestic investors continued to deploy money through systematic investment plans (SIP) and lump-sum allocations." FE. In effect, FIIs repatriated foreign exchange bought by Indian rupees from domestic investors. But Indians are not allowed to buy and hold foreign currency. The result is that the RBI and the government can make Indians poorer deliberately. One US dollar bought Rs 59.44 in May 2014 (Thomas Cook) when Mr Narendra Modi was first elected prime minister (wikipedia), and is at 94 to one dollar this morning (xe.com). That is an impoverishing devaluation of over 58%. A weaker currency causes inflation by  increasing prices of imports and higher prices further reduce the value of the rupee. The RBI has been tolerating retail inflation at over 4% in most years (RI) and has overseen the rupee reduced to near junk. High inflation helps the government reduce its debt by increasing tax collections and rupee devaluation reduces the value of the debt. Economics Help. Thus, the RBI has been systematically transferring the wealth of Indian citizens to the government. In 2022, the RBI allowed foreign banks to open 'Vostro accounts' in Indian banks so as to enable payment for imports in Indian rupees. pib.giv.in. The idea is that when a company imports goods from a foreign company it will deposit the cost into the account of that country in an Indian bank in rupees which can then be used to pay for goods bought from India (Investopedia) by a company of the same country. This way India would save foreign exchange. This can only work if trade with another country is roughly equal but we incurred a deficit of $333.20 billion in merchandise trade and a surplus of $213.89 billion in services trade for a combined trade deficit of $119.30 billion in 2025-26. pib.gov.in. And, also the currency must retain its value. Russian banks opened vostro accounts in India to avoid Western sanctions but were stuck with over $8 billion in rupees in those accounts. They had to spend the money in buying Indian government bonds, machinery and arms. Mint. Ordinary Indians do not understand all these shenanigans but they can feel that they are being cheated somehow. So they buy gold. "Morgan Stanley economists Upasana Chachra and Bani Gambhir estimate that Indian households now hold 34,600 tons of gold worth nearly $3.8 trillion (Yahoo) which is just below India's nominal GDP at $3.916 trillion  (TOI). Ironically, India fell from 4th largest economy in the world to 6th because of the slump in the rupee. As India's central bank, the RBI should control inflation and honor the rupee. Making citizens poorer is no sovereignty. No capital account convertibility? No problem - there's gold convertibility. Tons of it.