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The Great Indian Economic Illusion: Who Is Buying Gold at Rs 1,62,000?
May 2026 | A Critical Analysis
Namaskar. On the 14th of May, the price of 10 grams of gold touched Rs 1,62,000. The question that begs an answer is – who is buying gold at this price? Certainly not those who had to leave their cities because they couldn't get a cooking gas cylinder. Not those who shut their shops when a commercial cylinder crossed Rs 3,000. And definitely not the ones who break their backs doing home deliveries. The working class cannot even dream of buying gold at these rates. So then, who is buying?
The Prime Minister of India appeals to the public: "Don't buy gold." But he should first tell us – in the last 12 years, which category of people bought gold at prices exceeding Rs 1 lakh? How much gold did they buy? How many such people are there? The real game is elsewhere. Appeals are being made to those who write down every vegetable purchase in their diaries, but no information is being given about those who buy 20, 30, 50 lakhs worth of gold in a single transaction. This is India's money.
The Rupee's Free Fall: A Timeline of Negligence
Let me show you a news report from September 2024: among 48 Asian countries, the Bangladeshi Taka performed the worst, and the Indian Rupee came in second worst. Another report from January 2025 stated that India's currency was the worst performer in South Asia. By February 2025, the Rupee became Asia's worst-performing currency, with the dollar reaching Rs 87.58. Today, the Rupee is the worst-performing currency in the entire world.
If a global war has caused a crisis, why is India's Rupee suffering the most? On 28 February, the situation worsened due to war, but the Rupee had already been in serious decline for two years. By December 2025, reports predicted the Rupee would fall below 92 by March 2026. But it hit 92 in January 2026 itself, and crossed 95 in March. Let's look at the hard data:
| Date | USD/INR Rate | Key Event / Report |
|---|---|---|
| September 2024 | ~85-86 | Rupee 2nd worst in Asia |
| February 2025 | 87.58 | Asia's worst performer |
| December 22, 2025 | ~90-91 | Report predicted below 92 by March 2026 |
| January 2026 | 92.00 | Hit 92 – earlier than forecast |
| February 14, 2026 | ~93 | Fitch said could reach 93 by year end |
| March 30, 2026 | 95.00+ | Rupee crosses 95 for first time |
| April 1, 2026 | ~95-96 | Bloomberg warns could cross 100 |
| May 12, 2026 | 95.63 | Chief Economic Advisor finally concerned |
| May 14, 2026 | 95.85 | Gold hits Rs 1,62,000 per 10g |
Government's Denial: "Just a Number"
On 12 May 2026, when the dollar reached Rs 95.63, India's Chief Economic Advisor Anantha Nageswaran suddenly declared: "We must stop the Rupee from falling further." But just five months earlier, when the dollar was at Rs 90.21, he said, "I don't want to lose sleep over this." So at 90.21 he slept peacefully; at 95.63 an alarm went off. What changed? The truth is the Rupee has been falling since 2024, but the government never bothered.
On 30 March 2026 – the day the Rupee first crossed 95 – Finance Minister Nirmala Sitharaman was asked by Samajwadi Party MP Dharmendra Yadav why the Rupee was weakening. Her response? She claimed all economic fundamentals are strong, the fiscal situation is strong, and the whole world is praising India. She said the Rupee is doing fine compared to other emerging markets, and that critics are just fixated on one "issue" – the exchange rate. One issue? The currency collapse is just an "issue" for her.
But here is the reality: despite the RBI selling dollars from forex reserves, the Rupee crashed through 95 within a week. And why is the government appealing to citizens to save foreign currency? Because the real problem is a shortage of dollars.
The Real Reasons: Import Dependency and Failed 'Make in India'
India imports almost all the gold it consumes, 90% of its oil, natural gas, edible oils, fertilizers, electronics, and industrial inputs. All of these must be paid for in dollars. Over the last 12 years, India's import dependence has only increased. The "Make in India" initiative has failed. We did not become self-reliant; instead, we became more dependent on imports. The quality of exportable goods did not improve, and the world was not interested in buying from India. Meanwhile, the war, the Hormuz crisis, and oil price shocks increased demand for dollars while supply dried up. The Rupee is under pressure because of 12 years of accumulated failures.
Consider this: On 22 March 2026, despite RBI selling dollars in the forex market, the Rupee hit 93.72. A week later, it crossed 95. The RBI's interventions proved futile. And the Prime Minister's appeal not to buy gold is actually a cover for the dollar crisis. But instead of addressing structural issues, the government hides behind global crises.
The Great Hypocrisy: Appeals to the Poor, Silence for the Rich
The Prime Minister asks citizens to save foreign currency – use less oil, don't travel abroad, don't buy gold. But why doesn't he appeal to those who are taking dollars out of the country? Why no appeal to foreign investors who are fleeing? Why no request to the wealthy to bring back money parked abroad? In the last 12 years, those who have flourished under this government are the same ones sending their children to study abroad, sending dollars out, and acquiring foreign citizenship.
And what about the government's own extravagance? Between 2021 and 2025, PM Modi spent over Rs 460 crore on foreign tours. What was the outcome of those trips? No debate on that. Instead, the media focuses on who funds Rahul Gandhi's foreign visits. This is the pattern – first, ban red beacon lights to pretend an end to VIP culture, then travel in a convoy of 100 cars, and later reduce from 5 cars to 2 cars and call it sacrifice for the nation.
War as an Excuse: The Crisis Was Brewing Long Before
The government keeps repeating: global crisis, war, global crisis. But the Rupee started falling in 2024 – two full years before the February 28 attack. In September 2024, reports already warned that India's economy was in trouble. Even if there were no war, the Rupee was already on a downward slide. The government had 2 to 2.5 years before the war to fix the economy, but they failed because fundamental problems had become severe. Now, to hide this failure, they chant "global crisis" like a mantra.
And if the war is truly the cause, why hasn't the government criticized America's illegal war? Why are Indian ports turning away Russian and Iranian oil tankers due to fear of U.S. pressure? America said stop buying oil from Russia – and India stopped. Where is the bold foreign policy that would secure energy independence? India now begs the U.S. to extend waivers for Russian oil. This is a failure of economic diplomacy.
| Indicator | Value (2024-2026) | Change / Status |
|---|---|---|
| Forex Reserves (Feb 27, 2026) | $728.5 billion | Dropped by $37.8 billion in 2 months |
| Forex Reserves (May 1, 2026) | $690.7 billion | |
| Hungary (oil/gas importer) | Reserves +1.3% | Increased despite war |
| Chile (oil/gas importer) | Reserves +1.0% | Increased despite war |
| Taiwan, Peru | Minor decline | Much smaller drop than India |
| India's share of global market cap (peak) | 4.73% | Fell to below 3% |
| India's share of global market cap (May 2026) | Below 3% | |
| FPI outflows (2025 - May 2026) | Rs 3.6 lakh crore | ~$43 billion |
Stock Market and Corporate Distress
Former finance secretary Subhash Chandra Garg wrote in Quint that India's stock market was among the worst in 2025, while other global markets saw rallies. In 2026 as well, Indian markets are lagging. Corporate profits are not exciting investors. The high growth era of IT and startups is over. India has no visible base in AI chips or energy transition. Retail investors who entered through SIPs and gold funds are now seeing negative returns. The risk-taking capacity of the market is evaporating.
And what about unemployment? The highest in 50 years. In 2025, demand started falling, and there were demands to reduce GST rates. The government made a grand announcement on August 15, 2025, that GST rates would be cut after Diwali. People stopped buying in anticipation, companies were stuck with inventory, and then nothing happened. The discussion just died because the government was winning elections.
The Modi Government's Obsession with Distraction
When COVID hit, Narendra Modi asked people to clap and ring bells. Now an economic storm is coming, and he asks people not to buy gold. The same government that cannot conduct a medical entrance exam without cheating wants us to believe that all economic fundamentals are strong. When the Rupee is falling, the Finance Minister says "it's just one number." When foreign investors are pulling out billions, she says they don't matter. But then why appeal to the common citizen to save foreign currency?
In February 2022, PM Modi dug up a 60-year-old speech by Jawaharlal Nehru where Nehru said that a war in Korea could affect Indian prices. Modi mocked Nehru for throwing up his hands. But today, Modi himself is throwing up his hands and blaming a global war. What's the difference? At least Nehru was honest about the limits of control. Modi pretends that everything is fine while the Rupee collapses.
Facts
- - Gold price per 10 grams reached Rs 1,62,000 on May 14, 2026.
- - USD/INR crossed 95 on March 30, 2026, and hit 95.85 on May 14, 2026.
- - Between September 2024 and May 2026, the Indian Rupee was consistently among the worst-performing Asian currencies.
- - Forex reserves fell from $728.5 billion (Feb 27, 2026) to $690.7 billion (May 1, 2026) – a drop of $37.8 billion.
- - In the same period, Hungary and Chile (also oil importers) saw their reserves grow by 1.3% and 1% respectively.
- - Foreign Portfolio Investors (FPIs) pulled out Rs 3.6 lakh crore (approx. $43 billion) from 2025 to May 2026.
- - India's share of global stock market capitalization fell from 4.73% to below 3%.
- - PM Modi's foreign travel expenses between 2021 and 2025 exceeded Rs 460 crore.
- - Wholesale price inflation (WPI) jumped from 3.88% in March 2026 to 8.30% in April 2026 – a 3.5-year high. Fuel and power inflation stood at 24.71%.
- - The government imposed a ban on export of raw and refined sugar from September 30, 2026 – at a time when it needs dollars the most.
Criticisms
- - The Modi government deliberately ignored the rupee's decline for over two years, then blamed a war that happened much later.
- - Finance Minister Nirmala Sitharaman dismissed the crashing rupee as "just an issue" and claimed strong fundamentals while the currency bled.
- - Chief Economic Advisor Anantha Nageswaran slept when the dollar was at Rs 90, but panicked at Rs 95 – exposing his lack of foresight.
- - The "Godi media" (compliant media) shielded the government by not reporting the rupee's true condition, allowing the crisis to deepen unnoticed.
- - Make in India failed. Import dependence increased, and export competitiveness did not improve, leading to a perpetual dollar shortage.
- - The government imposes export bans (e.g., sugar) when dollars are needed most, showing contradictory economic planning.
- - PM Modi's foreign tours costing Rs 460 crore delivered no tangible economic benefit to the common citizen.
- - The appeal to the poor and middle class to "save foreign currency" while the wealthy freely send dollars abroad for education, travel, and assets is hypocritical.
- - The government cowardly bowed to U.S. pressure by stopping Russian oil imports, compromising India's energy security.
- - The obsession with winning elections through religious politics has masked the worst unemployment crisis in 50 years and a consumption collapse.
This is the state of India's economy. And while the government hides behind war, global crises, and distractions, the common man pays the price – through inflation, unemployment, and a currency that has lost all respect. The question is not who is buying gold at Rs 1,62,000. The question is: when will the people stop buying the government's lies?
Written by DeepSeek.
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