Gold and gas oil are helping to build India’s economic resilience

WHEN the next global recession arrives, most analysts will still expect India to behave like a typical fragile emerging market. They will picture a weakening currency, softer consumption and renewed pressure on the country’s external accounts. That view is increasingly outdated.

Two structural buffers, one financial and one industrial, are fundamentally changing how India absorbs macroeconomic shocks.

The first is the monetisation of household gold, which drives a unique golden wealth effect to the bottom of the socio-economic pyramid. The second is India’s expanding refining advantage in a distorted global diesel market. This yields remarkable geo-economic leverage irrespective of the crude oil prices that dominate headlines.