Skip to main content

https://indianmasterminds.com

ADVERTISEMENT
ADVERTISEMENT

India’s Gold Obsession Is Costing 20 Times More Than Ethanol Saves: Time to Rethink Forex Priorities

India has spent an estimated USD 400–450 billion on gold imports over the past decade—around 20 times the foreign exchange saved through ethanol blending—highlighting the need for a broader strategy to tackle forex outflows from gold and overseas education.
Indian Masterminds Stories

Every few months, a minister stands at a podium and announces, with justified pride, how much India has saved by blending ethanol into petrol. The most recent figure, cited by Petroleum Minister, is striking: nearly USD 19.3 billion in foreign exchange saved over the past decade, alongside more than USD 15 billion paid directly to sugarcane and grain farmers. Blending rates have shot up from a token 1.5 per cent in 2014 to 20 per cent in 2025, five years ahead of schedule.

It is a genuine policy success — cleaner fuel, higher farm incomes, reduced crude dependence. But it is also, when placed next to India’s other import obsessions, a fairly small number being made to carry an outsized share of the “curbing imports” narrative.

Consider gold. India’s gold import bill hit an all-time high of USD 71.98 billion in 2025-26 alone — nearly four times the *entire decade’s* worth of ethanol savings, in a single year. The trajectory over the past ten years tells its own story: roughly USD 35 billion in 2015, dipping through the pandemic, then climbing to USD 35 billion again in 2022-23, USD 45.5 billion in 2023-24, USD 58 billion in 2024-25, and now nearly USD 72 billion. Add it up and India has likely spent somewhere between USD 400 and 450 billion on gold imports over the past decade — twenty times what ethanol blending has saved. Switzerland alone supplied gold worth over USD 24 billion to India last year. Precious metals now account for more than 5 per cent of the country’s total imports, and gold has historically driven a quarter or more of India’s trade deficit in high-import years.

Then there is the money leaving the country for education. Here the numbers depend on what is counted. The Reserve Bank of India’s narrow “studies abroad” remittance category — which captures tuition and living costs sent through formal banking channels runs into billions of dollars. According to NITI Aayog estimate, presented earlier this year, puts India’s students’ overseas tuition and living costs at nearly Rs 6.3 lakh crore, or roughly USD 75 billion, accumulated with a nearly 2,000 per cent rise in outflows over the past decade under the Liberalised Remittance Scheme. One industry estimate pegs annual spending on foreign education at USD 44 billion in 2024 alone, projected to touch USD 91 billion by 2030. For every one foreign student who comes to study in India, 28 Indian students go abroad — a lopsided ratio with real consequences for foreign exchange.

Put these three numbers side by side, and the imbalance in public discourse becomes obvious. Ethanol blending gets the press conferences and the five-year-ahead-of-schedule congratulations. Gold, which costs the exchequer many times more, gets treated as an immovable cultural fact. And the slow bleed of foreign exchange through students seeking a quality of education and research infrastructure they cannot always find at home barely features in the conversation about import bills at all.

This is not an argument against ethanol blending — it should continue, and be expanded further. But it should be pursued with open eyes about its costs. Diverting sugarcane and foodgrain to ethanol raises legitimate food-security questions, particularly given that sugarcane is a notoriously water-intensive crop grown in states already under water stress. And on the consumer side, E20 fuel reportedly cuts mileage by roughly ten  per cent in vehicles not built for it — which describes the overwhelming majority of India’s existing fleet of some 30 crore vehicles. A driver burning more fuel per kilometre to compensate is quietly eating into the very import savings the policy is meant to deliver, not to mention the warranty and engine-wear disputes already surfacing. None of this makes ethanol a bad policy; it makes it an incomplete one if pursued in isolation, without matching investment in E20-compliant vehicle transition and safeguards for food and water security.

Gold is harder to fix by fiat, precisely because it isn’t really a policy failure — it’s deeply embedded in Indian household behaviour as a wedding necessity, an inflation hedge, and a form of savings that doesn’t require trusting a bank or a stock market. Import duty hikes, the Gold Monetisation Scheme, and Sovereign Gold Bonds have all been tried, with only partial success in denting physical demand. But precisely because the number is so large, even a modest success in nudging household savings from idle gold into productive financial instruments would swamp any single-fuel-policy gain many times over. This deserves at least as much ministerial attention as ethanol blending does.

Education is the slowest fix of the three but arguably the most important. Building genuinely world-class research infrastructure, faculty pipelines, and industry-linked laboratories takes decades of sustained investment, not one budget announcement. It is also worth being honest that many students go abroad not purely to save money but for research quality, global exposure, and post-study work opportunities that Indian institutions, for all the progress of the IITs and IIMs, still cannot fully match. Investment in domestic higher education will not stop the outflow entirely — but it would help at the margin, and unlike gold, it is a lever entirely within government control.

The larger point is this: India’s import bill is not primarily an oil problem being solved by ethanol. It is a portfolio of habits — some cultural, some structural, some aspirational — of which oil is only one part, and arguably not even the largest one that is realistically fixable. A prudent strategy treats ethanol, gold, and education as three separate problems requiring three different tools, rather than allowing one modest success story to stand in for a comprehensive one. Continuing to celebrate ethanol blending while gold imports quietly run twenty times higher is not strategy. It’s selective arithmetic.

(Vijay Shankar Pandey is former Secretary Government of India)


Indian Masterminds Stories
Join our WhatsApp Channel
ADVERTISEMENT
ADVERTISEMENT
Related Stories
ADVERTISEMENT
ADVERTISEMENT
NEWS
punair dham temple janki maata
Bihar’s Sacred Landmark Gets a Grand Makeover: Punaura Dham Temple Targeted for 2028
bihar rani mistry
Bihar’s ‘Rani Mistris’ Break the Male Monopoly, Earn ₹10,000 Extra Through Skilled Work
mp irrigation
MP Farmers to Get 10 Hours of Daytime Power as CM Yadav Pushes Irrigation Expansion
UP Police SSS Defence M72 carbines Induction
UP Govt Transfers 35 IPS Officers in Major Reshuffle; Shravan Singh Gets Noida, Sonam Kumar Moves to Prayagraj
AGMUT resized
Two AGMUT-Cadre IAS Officers Neeraj Semwal and Ravi Jha Shifted from Delhi to Arunachal Pradesh
e busdelhi
Delhi’s E-Bus Push: ₹300 Crore Charging Network Planned Across 7 Depots
BEML CMD Shantanu Roy
BEML CMD Shantanu Roy Honoured as ‘Best CEO of the Year 2026’ by IIMM
gorakhpur gda-900x550 (1)
UP: Gorakhpur Development Authority to Deploy 48 More Ex-Servicemen for Property Security
ADVERTISEMENT
ADVERTISEMENT
Videos
Keshav kumar
From Police Officer to Forensic Pioneer: How Dr Keshav Kumar Made Science a Weapon Against Crime
ChatGPT Image Aug 20, 2026, 05_46_21 PM
How IPS Officer Keshav Kumar Used Forensics to Crack Gujarat’s Lion Poaching Case
Shakeel Ahmad Ganie IRS Interview
‘My Path Has Not Been Straight’: Shakeel Ahmad Ganie’s Journey to the IRS
ADVERTISEMENT
UPSC Stories
Umar Janj UPSC CAPF AC 2025
After 15 Failures, Umar Janj Finally Heard the Words He Had Been Waiting For: ‘I have made it'
Umar Janj from Jaisalmer secured AIR 160 in UPSC CAPF 2025 after 15+ failures, four attempts, four SSBs...
Abhishek Parmar
NDA Failures, CAPF Setbacks, Then AIR 248:How Abhishek Parmar Overcame Years of Exam Setbacks
Abhishek Parmar became the third generation of his family to enter uniformed service after overcoming...
Naveen Kumar Saini UPSC CAPF
After 3 NDA Attempts and a 7-Mark Miss, Naveen Kumar Saini Gets AIR 7 in UPSC CAPF 2025
Naveen Kumar Saini secured AIR 7 in UPSC CAPF 2025 after multiple NDA and SSB failures and missing CAPF...
CSR NEWS
NTPC Kanti CSR
NTPC Kanti Allocates ₹1 Crore CSR Budget to Improve Seven Chhath Ghats in Muzaffarpur
CSR initiative under FY 2026-27 will improve community infrastructure and provide safer, more convenient...
NCL Nanha-Sa-Dil
NCL Launches Second Phase of ‘Nanha-Sa-Dil’ CSR Initiative to Provide Free Cardiac Care to Children
₹9.17 crore programme to organise 700 screening camps, cover 52,500 children and facilitate 500 cardiac...
WCL Happy School Project
WCL Signs MoU to Transform Nagpur School Under Happy School Project, 267 Students to Benefit
Project will modernise Shishu Vihar Uccha Prathmik Shala with improved infrastructure and digital interactive...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
Latest
punair dham temple janki maata
Bihar’s Sacred Landmark Gets a Grand Makeover: Punaura Dham Temple Targeted for 2028
bihar rani mistry
Bihar’s ‘Rani Mistris’ Break the Male Monopoly, Earn ₹10,000 Extra Through Skilled Work
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
Videos
Keshav kumar
ChatGPT Image Aug 20, 2026, 05_46_21 PM
Shakeel Ahmad Ganie IRS Interview
ADVERTISEMENT
ADVERTISEMENT