India, the world’s third-largest oil importer, has been hit hard by the inflationary shock caused by energy disruptions in the Persian Gulf.
Gold is the country’s largest import item after crude oil. Higher import bills have driven sharp foreign-exchange outflows, pushing the rupee down to a record low and prompting the Reserve Bank of India to step in.
New Delhi is still weighing other emergency steps, including raising fuel prices and curbing non-essential imports like electronic goods.
Gold is deeply ingrained in Indian culture and plays a vital role in savings, weddings and religious festivals. India meets almost of all its demand through imports, with 710 tons of gold coming in last year.
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