Indians have been using gold as a way to preserve their wealth for generations. The metal has always held a special place in Indian households, both as a traditional investment option and a store of value. But now, veteran banker Uday Kotak is raising concerns about the possible rise in gold imports, questioning whether India should rethink its investment strategy. His approach sparks another important question- can Bitcoin replace the metal?
According to recent reports, veteran banker Uday Kotak has raised concerns over India’s rising gold imports. At the Conference on Financing India’s Journey Towards Viksit Bharat, Kotak highlighted the increasing capital Indians are putting into the yellow metal. He believes that the country’s gross gold imports would reach around $88–90 billion in FY27, marking a significant increase from $72 billion in FY26.
Kotak is not simply worried about Indian’s increasing gold purchases. When more gold is purchased, more money flows overseas. He argues that if Indians could reduce their investments, more capital could go into productive assets such as businesses and infrastructure.
It is important to note that gold continues to remain an important part of Indian investments. Besides being an investment, the metal can also be considered an invaluable asset that can be transferred from generation to generation. Besides, it may serve as an instrument for hedging one’s money against inflation and help financially in case of emergency situations.
It is important to note that the metal can be considered an excellent store of value when economic uncertainties arise. Contrary to stocks and firms, the value of the metal is not linked to the success of any company.
According to him, India already has enough capital to support businesses and infrastructure. It is not the capital flow into gold that holds back these investments. Other issues like corruption may be preventing capital from reaching productive areas.
Despite the strong position of gold in Indian households, Bitcoin has emerged as a new asset for investors looking for an alternative store of value. BTC is often referred to as “digital gold,” as it holds some similarities with the metal, including the limited supply.
At the same time, Bitcoin also has some added benefits. Unlike physical gold, Bitcoin can be held digitally. It can be used and moved across borders more easily than a physical asset. While gold has to be imported, with the funds flowing out of India, Bitcoin does not require a physical import.
However, the cryptocurrency has a long way to go before it can match gold’s position in India. BTC is relatively new in contrast to the generation-old position of the yellow metal. As crypto is facing legal and regulatory changes in the country, it still has miles to go before becoming a clear alternative to the yellow metal.
Significantly, Bitcoin’s growing popularity in India doesn’t necessarily mean that it could soon replace gold. One of the biggest challenges for BTC is its price volatility. Gold is relatively stable, while the BTC price fluctuates sharply in seconds, sparking risks of financial losses. This makes it difficult for Indian households to see Bitcoin as an alternative to gold.
Another challenge is India’s tax policy. The Income Tax Department levies a 30% tax on VDA gains and 1% TDS on transactions. This huge tax remains another major challenge that keeps Indian away from the asset. The lack of clear crypto regulations also makes Bitcoin a less-preferred asset compared to the metal.
(adsbygoogle = window.adsbygoogle || []).push({});Interestingly, if Bitcoin needs to become an alternative to gold, the crypto has to overcome several challenges. First of all, India should see Bitcoin as a legal asset, providing more regulatory clarity. Only with clear rules and legal acceptance, investors may find more confidence in the asset.
Another challenge that needs to be managed is price volatility. As the BTC price moves sharply, investors may remain less comfortable with it, due to concerns about losses. Over time, if this fluctuation becomes moderate, it could open more opportunities for the coin in the country.
