Twenty five million kilos of gold.

"Gold will remain relevant for investors as a portfolio diversification mechanism with a likely ascending importance as an asset class in the coming years, CEA V Anantha Nageswaran said." "Since 2002, the value of the precious metal is up 10 times when it was about $250-290/ounce." "India is a net importer of gold." TOI. "The World Gold Council's 2020-21 study indicated that Indian households own between 21,000 and 23,000 tons of gold. By 2023, this figure had increased to approximately 24,000 and 25,000 tons, or 25 million kilograms of gold." "This gold reserve also plays a role in supporting India's economy, covering 40% of the nation's GDP." TOI. Indians buy gold to hedge against inflation, the falling value of the rupee and, for most of the time, a negative real interest rate which is less than the rate of inflation (BI). The rate of annual inflation in India has been at around 6% on average (RI), while the interest rate was brought down from 6% in April 2019 to 4% by May 2020 and held there till May 2022, from where it was increased gradually to 6.50% in February 2023 (bankbazaar.com). In February 2025, "The Reserve Bank of India (RBI) reduced its repo rate from 6.5% to 6.25%, in line with the expectations of many economists." BBC. "India's retail inflation eased to a seven-month low of 3.61% in February, down from 4.31% in January, according to government data. ET. So, "The RBI will likely slash the benchmark repo rate by a total of 75 basis points (bps) in 2025, with upcoming 25 bps reductions each in April, June and October policy meetings." They expect consumer price (CPI) inflation to average 4.7% in FY25 and between 4% and 4.2% in FY26. Mint. Are they being optimistic or deliberately trying to fool us? "Data from India's Meteorological Department shows that last month was India's hottest February in 125 years." Heat is threatening this year's mango crop and, "Scorching heat is also threatening winter staples such as wheat, chickpea and rapeseed." BBC. Scorching heat could lead to scorching inflation. Meanwhile, the rupee has fallen from 59.44 to one US dollar on 15 May 2014 to 86.61 for one dollar on 20 February 2025. Thomas Cook. One US dollar buys Rs 86.95 this morning. xe.com. "India's middle class is facing economic pressure as incomes have remained stagnant for the past decade," so that, "individuals earning between Rs 500,000 and Rs 10 million per year have seen no real income growth in 10 years. Meanwhile, inflation has eroded purchasing power by nearly 50%," said Saurabh Mukherjea. So why is the RBI so casual about controlling inflation? Because high inflation helps the government by reducing the value of its debt and by increasing tax collections, as GST is a percentage of the retail price. Economics Help. And, the RBI is controlled by the government with no real independence, wrote Bhargavi Zaveri Shah. It may seem that Indians buy gold to hedge against economic uncertainties but in reality they buy gold as protection against the government. The real predator.