One always shudder to think if ever situation like 1991 returns when India had to pawn the gold to get some billion dollar in loan to tide over the payment crisis. Have a look at the chart depicting the Indian foreign reserve.
Gold had been a biggest culprit after crude and govt has taken the right steps to clamp on unnecessary import as Indians have a habit of hoarding gold. One can not do much about the crude as economy of a country moves on the oil and this is the reason wars are considered to be fought for only that many days for which a country has crude reserves. The Indian foreign exchange healthy position is a must as it caters for reducing the current account deficit which is (total imports-total exports) and we will have a large current account deficit if total imports is greater than total exports. You can check latest gold tip here and not to forget the Indian current account balance to get a pragmatic view as a nation here.
