Gold ornaments play a critical role in the production of goods and services – and the sustaining of life – in India's informal sector. Held largely in the form of ornaments, the gold owned by Indian households is estimated to weigh 25,000 tonnes – which is equal in combined rupee value to about 40 per cent of the country's gross domestic product (GDP) (Pattanayak 2019). Since Independence in 1947, policymakers in India have been preoccupied with preventing gold acquisition and ownership – which they see as keeping capital idle and unproductive in addition to being a drain on foreign exchange reserves (EPW Research Foundation 2005; see discussion in Chapters 1 to 3 in this volume). Yet even from prior to the period of colonial rule1 and despite a three-decade-long set of restrictions on imports, gold has constantly been in circulation in agricultural and business cycles, in festivals and marriages.

In this chapter I show how gold has not been idle or deployed for unproductive purposes. Indeed, it is essential for production. The opening up of markets to gold imports through the 1990s came as part of broader liberalisation reforms in India. These included dismantling trade barriers on thousands of commodities. Silk, the commodity focus of this chapter, was one (Patnaik 2005). At this time, ‘monetising’ gold by promoting lending against it by banks and specialised gold loan companies became a policy priority (Vaidyanathan 1999). This reshaped the landscape of gold-based lending in India.

While this book shows how gold is produced, distributed and then deployed in socially separate stages, the same is true of many other commodities in India. Silk is no exception.