India holds 34,600 tonnes of gold, 3.1x the value of current equity holding

India cumulatively held 34,600 tonnes of gold as of June 2025, valued at nearly $3,785 billion at the current gold price of $4056 per ounce (oz), suggests a recent note by Morgan Stanley.  This holding is nearly 88.8 per cent of India’s gross domestic product (GDP), the note said; and at the current market value is about 3.1x times the current equity stock holding with Indian households, which is valued at $1,185 billion.

 

India, experts suggest, is one of the largest markets for gold in the world, driven by cultural affinity for the yellow metal, investment demand and economic factors. Its significance as a store of value, hedge against inflation and a safe haven asset have made it an invaluable asset for the Indian household. 

 

 

According to the World Gold Council (WGC), India accounted for nearly 26 per cent of the world's global gold demand as of June 2025 on a four-quarter trailing basis, (versus a 5 year-average of 23 per cent), second only to China, with a share of close to 28 per cent. 

 

While jewelry comprises the bulk of demand for gold in India with a two-thirds share, the share of bars and coins, i.e., retail investment instruments, has picked up over the last 5 years from 23.9 per cent in quarter ended June 2020 to 32 per cent in quarter ended June 2025, data suggests. 

Indian household balance sheet

 

In volume terms, India's annual gold consumption has been largely range-bound between 750 and 840 tonnes since 2021, reports suggest, meaningfully lower than its peak of 1,145 tonnes in quarter ended June 2011. 

 

“However, owing to the sharp acceleration in domestic gold prices, gold consumption, in value terms, sky-rocketed to a fresh all-time high of $68 billion on a four quarter trailing basis, in quarter ended June 2025, versus $44 billion in quarter ended June 2023. Historical data indicates the earlier peak of $55 billion was reached in quarter ended June 2013, on the back of strong volume trends (1067 tonnes),” the Morgan Stanley note said.

 

Need for diversification

 

As the trends of financialisation and formalisation of the economy are becoming more entrenched, analysts suggest diversification of household savings to market-linked products is gaining prominence, especially with the retail investors. 

 

Within household financial savings, the share of deposits has moderated to 35 per cent in FY25, from 40 per cent in FY24 and 46 per cent pre-pandemic, the Morgan Stanley note said, while equities has edged up to an all-time high of 15.1 per cent in FY25 from 8.7 per cent in FY24, and around 4 per cent pre-pandemic.

 

Ridham Desai, Head Of India Equity Research & India Equity Strategist, Morgan Stanley expects these trends to be sustained, and the share of equity in the household balance sheet to accelerate further, led by favourable demographics, increasing investor education, a low starting point of domestic equity ownership, policy change allowing retirement funds to buy stocks since 2015, and an improved regulatory environment.