It is a paradox that has stumped economists for decades – for a country afflicted with severe poverty, Indians are one of the biggest purchasers of gold in the world. In 2015 alone, India imported nearly 900 tonnes of gold – more than any other country and about a quarter of the global supply.
It is possible to resolve these contradicting elements of Indian society if one looks closely at the reasons that fuel India’s obsession with gold. The reasons are historical, cultural and societal in nature and are very closely tied to the ‘prestigious’ label that is bestowed on gold, in large part due to its beauty and rarity. Gold has enjoyed this exalted status in India since ancient times – rulers and emperors would deck their palaces in gold, and would often donate their weight in gold to the poor as a sign of their generosity.
In India, gold is considered to be a symbol of prosperity; this is manifested most plainly in Indian weddings, where the quantity of gold jewellery the bride wears is considered to be a reflection of the family’s social and economic standing. Historical associations between gold and purity play a huge part in India’s infatuation with 22 karat gold; gold in its purest and most superior form is thus deemed as a worthy possession of an opulent family.
Apart from the monetary value of gold, though, there is also an emotional and sentimental value attached to the gold jewellery the bride wears. The jewellery is considered to be a family heirloom that the bride will one day pass on to children of her own, and it is the thread that links different generations of a family together. Thus, gold is more than a mark of wealth, but also the carrier of ancestral memories and identity.
The exclusivity of gold also makes it a popular choice for gifts given to friends and family on special occasions and festivals. Whether as a trinket or a ring, a coin or a bar, a gift of gold speaks volumes of the affluence and generosity of the person who presents the gift.
It is important to note that in times when money is squandered with increasing abandon on fancy cars and designer shoes, gold ornaments aren’t just a more logical investment, but also constitute a more refined and dignified show of wealth. And unlike cars and shoes, gold never goes out of fashion and is always in demand
Understanding such cultural and societal perceptions of gold not only help us to resolve the aforementioned paradox, but also highlight the important social benefits of purchasing gold. As a symbol of wealth, as a token of family prestige and as an indicator of social standing, gold far exceeds in importance than any other material substance in India.