India continues to maintain its position as one of the world’s largest gold markets, with a cumulative holding of 34,600 tonnes of gold as of June 2025. At the prevailing gold price of Rs. 3,59,809.79 (US$ 4,056) per ounce, this stockpile is valued at nearly Rs. 3,35,76,735 crore (US$ 3.785 trillion), according to a note by Morgan Stanley. The total gold reserves represent approximately 88.8% of India’s GDP and are 3.1 times the value of current household equity holdings, which stand at Rs. 1,05,12,135 crore (US$ 1.185 trillion).

The strong demand for gold in India is fueled by multiple factors, including cultural affinity, its role as a store of value, a hedge against inflation, and a safe haven asset during periods of economic uncertainty. Data from the World Gold Council (WGC) indicates that India accounted for nearly 26% of global gold demand on a four-quarter trailing basis ending June 2025, second only to China’s 28% share.

Jewellery continues to dominate gold consumption, representing roughly two-thirds of demand, while retail investment in bars and coins has grown steadily, increasing from 23.9% in June 2020 to 32% in June 2025. This shift highlights the rising preference for gold as an investment vehicle, not just a traditional ornament.

In terms of volume, annual gold consumption in India has stabilized between 750 and 840 tonnes since 2021, below the peak of 1,145 tonnes in June 2011. However, due to rising domestic gold prices, the value of gold consumption reached an all-time high of Rs. 6,03,228 crore (US$ 68 billion) on a four-quarter trailing basis in June 2025, compared to Rs. 3,90,324 crore (US$ 44 billion) in June 2023.

Analysts note that Indian households are diversifying financial assets, with deposits declining from 40% of household savings in FY24 to 35% in FY25, while equities increased from 8.7% to 15.1% over the same period. Mr. Ridham Desai, Head of India Equity Research at Morgan Stanley, expects equity allocation to accelerate further, aided by favorable demographics, investor education, low prior equity ownership, retirement fund reforms, and a more supportive regulatory environment.

India’s gold reserves and growing equity adoption highlight the country’s evolving financial landscape. While gold remains a dominant store of value, increased participation in equities signals a shift toward balanced investment portfolios, combining traditional safe-haven assets with higher-return financial instruments.

The continued strength of the Indian gold market reinforces its global significance, while the rise in household equity investment supports long-term economic growth and financial inclusion. This trend positions India as a critical player in both global gold demand and emerging equity markets, reflecting a mature, diversified approach to wealth creation and asset management.

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