India's Gold Imports Debate: Sridhar Vembu Proposes New Accounting

Sridhar Vembu, the founder of Zoho, has suggested that India should not count gold imports as part of its current account deficit.

He believes that gold is different from other imports like oil because it is a long-term asset that retains its value.

Vembu argues that gold imports should be excluded from the current account deficit and the value of accumulated gold imports should be subtracted from net external debt.

This would give a more accurate picture of India's national balance sheet.

The debate comes as India's trade deficit has widened, with gold and oil imports being significant contributors.

While some economists agree with Vembu's perspective, others believe that gold imports should be included in the current account deficit as they represent a foreign exchange outflow.