As India's gold import bill swells and the rupee plunges to fresh lows, crypto educator Kashif Raza is pushing a controversial fix: promote domestic Bitcoin mining to replace some of the country's massive gold demand. India imports roughly 700 to 720 tonnes of gold each year — against domestic production of just 1.5 tonnes — and the government recently jacked up the import duty on gold and silver from 6% to 15% to stem the outflow. Raza argues that channelling that cultural and financial appetite into Bitcoin could ease pressure on the rupee and the current account.
The gold problem gets worse
India's gold habit has always been expensive, but this year it's become a full-blown headache. The rupee is trading near 96.9 per US dollar, a record low, while Brent crude has surged past $100 a barrel because of the Iran conflict. That wider import bill — oil plus gold — is hammering the currency. Prime Minister Narendra Modi in May 2026 urged households to skip non-essential gold purchases for a year. But roughly 40% of India's gold holdings sit in just five southern states, and Raza estimates that 75% to 78% of Indian adults are financially illiterate, leaning on gold as a cultural necessity rather than a calculated investment.
Why Bitcoin mining might work
Raza's pitch is straightforward: cryptocurrency mining is legal in India — no law bans it — so why not use it to offset some of that gold-related forex drain? He argues Bitcoin beats gold on divisibility, portability, storage, and fixed supply. If domestic miners can earn Bitcoin and sell it abroad, that inflow of foreign currency could offset some of the outflows from gold imports. The idea isn't entirely new, but it's getting more attention as the rupee crisis deepens.
The tax reality check
There's a catch, and it's a big one. Profits from crypto mining are taxed at 30%, and every transaction triggers a 1% tax deducted at source. That makes mining margins thin, especially with power costs rising. Raza doesn't pretend the tax regime helps — he's calling for a rethink — but he insists that even with the current rules, shifting even a fraction of gold demand into Bitcoin would reduce the forex hemorrhage. So far, no government official has endorsed the idea, and Modi's public plea suggests the administration wants less gold buying, not a substitute metal.
What happens next
The immediate question is whether the government will even entertain the mining-as-hedge argument. The RBI has historically been hostile to crypto, and the 30% tax was designed to kill speculation, not encourage mining. But with the rupee in freefall and oil above $100, officials may start looking for creative solutions. Raza has said he plans to submit a formal proposal to the finance ministry, though no date has been set. Whether Delhi bites — or simply doubles down on gold duties — remains an open bet.
