India, a semi-continent on its own with 1.2+ billion people living in the seventh largest country speaking 23 officially recognized language. So, it’s not a surprise for the country to be the third largest Purchasing Power Parity (PPP) and the tenth largest Gross Domestic Product (GDP) just in terms of economy.
The great economic momentum India gained in the last two decades came from the liberalization movement post 1991. If the country continued with this economic boom, it would overtake the world’s greatest economic nations in another decade.
One of the numerous factors that led India to have this booming economic power was ending the Gold Control Act in 1992. The Gold Control Act was a 1962 law that prohibits Indians to hold gold bars or coins. The throng of Indian skilled gold crafters had nothing to do but to buy smuggled gold or leave the country to find a living somewhere else. By ending this act, the government profited from the already-established gold industry either from taxes or by lessening the corruption rates that ate the Indian society and economy.
Gold already has a great value and significance in the Indian culture. Almost any occasion there is a reason to give or receive a gift of gold; wedding, newborns, etc. plus the previously mentioned skilled gold crafters made India truly a mecca of gold industry. Besides the rising of India as major IT and computing technologies, that used gold in plating and shielding electronics, and decreased the corruption levels even further, India is truly the next nominated country after China to lead the world economics in case of the declination of the world-leading U.S. economy.
In the past few years, after the Indian growth rate touched the people there and reduced the numbers under the poverty line, a new trend started to emerge, e-trading of gold. The India city Hyderabad was the top city in India lusting for this new trend. This fact along with the great numbers of Indians working, traveling and selling gold in the Arabian Gulf, specially Saudi-Arabia and the United Arab Emirates, may reflect the Indian desire to investment even more than it’s already investing in the yellow metal.
To sum up, India being the largest importer of physical gold paired with the development of IT and communication technologies there may be the largest potential in the future of physical gold industry. On the other hand, the new Forex market of small investors may push the world economy to other heights in the next few years.