Indian Households Hold About 28 Times as Much Gold as the RBI. What Would Make Them Sell?

Prime Minister Narendra Modi has twice this year asked Indians to avoid buying gold, first in May for a year and again on 1 September, according to Outlook Business. The reason is the import bill. India bought a record $71.98 billion of gold in 2025-26, up 24% on the year before, and the rupee touched a record low of 96.96 against the dollar in May.

The government's argument is that India does not need to buy more, because households already own an enormous stock. The World Gold Council's estimate, as cited by Business Today, is about 25,000 tonnes held by households and temples. The RBI officially holds about 880 tonnes. That makes private gold roughly 28 times the central bank's.

Figure 1. Household figures are estimates, and the two estimates differ by almost 10,000 tonnes. Official reserves are published numbers.

A number nobody has counted

Nobody weighs household gold. Every figure is built from decades of imports, jewellery demand and assumptions about what has been melted down or smuggled in, so it is only as good as those assumptions. Morgan Stanley estimated about 34,600 tonnes held by Indian households as of June 2025, worth nearly $3.8 trillion, or 88.8% of GDP. An industry body, ASSOCHAM, put the value near $5 trillion in April 2026 and said household gold exceeds the combined reserves of the world's top ten central banks.

Estimate	Tonnes	Value	Source and date
World Gold Council figure, as cited	about 25,000	$2.3 to $2.4 trillion	Business Today, September 2025
Morgan Stanley	about 34,600	nearly $3.8 trillion	Note reported October 2025, stock as of June 2025
ASSOCHAM	not stated	about $5 trillion	IANS, April 2026

The dollar values differ because the tonnage estimates differ and because the gold price moved between the dates. Our reading is that the stock is probably somewhere between 25,000 and 35,000 tonnes, and that no source can narrow it further. The comparisons below use both ends.

Compared with	At 25,000 tonnes	At 34,600 tonnes
RBI (880 tonnes)	28.4 times	39.3 times
United States (8,134 tonnes)	3.1 times	4.3 times
Germany (3,350 tonnes)	7.5 times	10.3 times
All central banks (about 36,000 tonnes)	0.69 times	0.96 times

On the Morgan Stanley estimate, Indian households hold nearly as much gold as every central bank in the world put together. On the lower estimate they hold about 70% as much.

Why households choose gold

Gold is not a failure of financial literacy. For a household with no pension and uneven access to credit, it is the savings account and the insurance policy. It keeps its value when prices rise, and it can be pledged for a loan quickly, with no payslip or credit score.

The formal alternatives are patchy. Mercer's 2025 pension index found that the EPFO, the National Pension System and the Atal Pension Yojana together cover less than 25% of the workforce, according to Business Today. A household that cannot count on a pension will hold something it can sell.

What the government has tried

India has tried to pull household gold into the financial system before. Under the Gold Monetisation Scheme, households deposit gold with banks and earn interest. The scheme mobilised 37.81 tonnes until March 2025, according to a written reply in the Rajya Sabha on 22 July 2025, reported by Informist. Against a stock of 25,000 tonnes, that is about 0.15%. The government discontinued the medium-term and long-term deposits from 26 March 2025 and kept the short-term ones. Business Today describes uptake of the monetisation scheme and the Sovereign Gold Bonds as limited.

This year the push runs the other way: buy less. The import duty was raised to 15% earlier in 2026, and the Prime Minister made his appeals. The government argues that gold households already hold can be recycled, sold or pledged, which would cut fresh imports. Jewellery retailers have launched programmes to bring idle gold back into circulation, and some jewellery stocks fell as much as 10% after the May appeal, according to Outlook Business.

Price, not quantity, drove the import bill. The Commerce Ministry puts the average import price up about 30%, from roughly $76,600 to roughly $99,800 a kilogram, according to the Free Press Journal. The RBI has been buying too: it added about 75 tonnes since 2024 to reach 880 tonnes, roughly 14% of forex reserves in late 2025.

What would make people sell

The "recycle your gold" pitch assumes the gold is idle. For many households it is working: it is the pension plan, the emergency fund and the loan collateral. A household will give that up only if what replaces it does those jobs at least as well.

The prize is large. One per cent of a 25,000-tonne stock is 250 tonnes, and at an illustrative ₹1.4 lakh per 10 grams that is about ₹3.5 lakh crore (₹3.5 trillion). It is also more than six times everything the monetisation scheme collected. Whether households see the same prize is another matter.

We can only guess why earlier schemes drew so little. Jewellery that is worn and inherited is hard to melt, and many households are unsure how it will be tested and weighed. Our view is that the order matters. A pension that keeps its value against inflation, and regulated loans against gold at fair rates that let a family keep the metal, come first. Asking for the gold comes after.

What to watch

• Festive-season jewellery demand after the September appeal.

• Whether the jeweller-led recycling programmes bring in more than the 37.81 tonnes the monetisation scheme collected.

• Whether the import duty of 15% holds, and what happens to the import bill if prices keep rising.

• The RBI's own purchases, since the institution asking households to buy less has been adding to official reserves.

Related reading on The Money Clause: The Moneylender Is Still Winning and How Central Banks Actually Work: The Most Powerful Institution Nobody Talks About.

Sources

• Outlook Business: Buy gold or save the rupee? Why Modi is warning Indians against fresh purchases

• Free Press Journal: India's gold imports jump 24% to a record $71.98 billion in FY26

• Business Today: From lockers to economy, India's 25,000 tonne private gold reserve

• Business Standard: India holds 34,600 tonnes of gold, 3.1x the value of current equity holding

• Free Press Journal: India's household gold holdings surge to $3.8 trillion, Morgan Stanley

• Free Press Journal: India's household gold hits $5 trillion, ASSOCHAM report

• Informist: 38 tonnes of gold mobilised under monetisation scheme till March

• Business Today: EPFO, NPS and APY cover less than 25% of workers, Mercer report