BlackRock and Reliance Urge Indians to Shift From Gold to Financial Assets

Last week, CNBC reported that Larry Fink, CEO of BlackRock, and Mukesh Ambani of Reliance Industries publicly encouraged Indian investors to diversify their savings away from physical gold and into financial assets such as equities and investment funds.

Their comments have reignited a long-running debate: Should Indians reduce their reliance on physical gold and invest more heavily in the stock market?

Key Facts at a Glance

• Indians are estimated to own over 25,000 tonnes of gold, the largest private stockpile in the world.
• This is more than three times the official gold reserves of the United States, held by the Federal Reserve.
• Around 59% of Indian household wealth in 2025 remains in physical assets such as gold and real estate (down from 66% in 2015).
• The International Monetary Fund forecasts India will grow 6.4% in 2026, compared to 3.3% global growth.

Why Do Indians Hold So Much Gold?

Unlike Western countries, where gold is often viewed primarily as an investment asset, in India gold serves a broader purpose.

Most of the country’s gold is not held by state institutions or the central bank. It is owned by households, typically in the form of jewellery, purchased during weddings, festivals, and religious celebrations, then passed down through generations.

Gold as a Store of Value

In India, gold functions mainly as:

• A store of value outside the banking system
• A hedge against currency depreciation and inflation
• A tangible asset independent of government control

This cultural and financial trust in gold has been built over decades. For many families, gold represents financial stability, liquidity, and financial security that is not dependent on institutional promises.

The Case for Financial Assets

According to Fink and Ambani, India’s economic outlook supports greater participation in financial markets.

The IMF expects India to remain the fastest-growing major economy in the world, with projected growth of 6.4% in 2026. By contrast:

• Germany, the United Kingdom, and Japan are expected to grow only in the low single digits.
• Global growth is forecast at 3.3%.

Fink argued that, based on BlackRock’s experience in the United States, those who invested in America’s economic growth through equities and financial products achieved significantly stronger long-term outcomes than those who kept their savings in cash or low-yield bank deposits.

In a separate interview with The Economic Times, he stated:

“The Indian stock market will double, triple and even quadruple in the next 20 years.”

He added that he does not expect similar long-term growth dynamics for gold.

India’s Efforts to Mobilise Household Gold

For years, Indian authorities have attempted to bring privately held gold into the formal financial system through various monetisation schemes.

The goal is to:

• Reduce reliance on imported gold
• Increase financial system liquidity
• Convert idle household assets into productive capital

However, results have been mixed.

Many Indian families deliberately hold gold precisely because it is outside the financial system. Trust in tangible wealth as a source of personal finance, often outweighs confidence in currency stability or policy consistency.

Is This About Modernisation or Control?

The push to reduce gold ownership is frequently presented as financial modernisation

Yet critics argue the deeper objective is to convert untaxed, unmeasured household wealth into assets that can be tracked, taxed, and integrated into the formal economy.

It is unlikely that policymakers are primarily concerned about missed equity returns. A more fundamental question may be:

Why do citizens continue to prefer gold over their own currency?

Currency Risk and Historical Memory

Observers note that public behaviour is shaped by lived experience. When populations have experienced currency instability, inflation, or financial restrictions, confidence is not easily restored through policy statements alone.

Critics argue that instead of questioning gold ownership, authorities should address concerns about:

• Long-term currency stability
• Inflation management
• Financial system trust

So far, gold monetisation initiatives have not led to widespread selling of privately held gold.

Market Perspective

Peter Reagan, senior financial markets strategist at Birch Gold Group, recently wrote:

“I strongly advise my readers in India to keep their gold.”

His view reflects a broader perspective within the precious metals community: while equities may offer higher growth potential, gold continues to serve as insurance against systemic and monetary risk.

Conclusion: Gold vs Stocks in India

The debate over gold versus financial assets in India is ultimately a question of trust, risk tolerance, and financial philosophy.

• Financial markets offer potential for higher long-term returns.
• Gold offers independence, stability, and protection from monetary uncertainty.

As India’s economy continues to grow, the balance between traditional wealth preservation and modern financial participation will remain a defining theme in the country’s financial future.